By Mike Bodeen · 17 February 2020
Personal income is a large determiner for future home appreciation. In the Phoenix area, most of the last 25 years had stagnant wage increases and therefore consistent but modest home appreciation, aside from the rise and fall of the local and national housing debacle of 2004-2011.
This is changing!
“I believe we will look back to see that 2020 will be Arizona’s turning point in real estate affordability. That much, to me, seems clear.”
According to the Phoenix Business Journal, a CBRE report recently stated that the Phoenix Metro area, with 85,000 high tech workers, is “one of the most rapidly expanding U.S. tech job markets surpassing Chicago and Los Angeles for tech employment.”
Vanessa Vogel, a CBRE senior research analyst and one of the report authors, also stated that Phoenix is an emerging tech market, with a region sought after for its talent, collaborative environment, business-friendly culture, and quality of life. Further, she said that “Phoenix is among the top three tech regions for most affordable rents. While salaries may be lower, that money can go further since Phoenix has a more affordable way of living.” We would add, affordable homes to buy as well.
Fellow CBRE report author Drew Callow said that “Maricopa County is the fastest growing county in the nation, and metro employment has grown 12% during the past 5 years. More than 60% of these 85000 jobs pay over the median household income, and Arizona Universities have graduated 70,000 STEM (Science, Technology, Engineering, Math) grads since 2010.”
Greg Vogel, founder and CEO of Land Advisors, said, “we have added 350,000 jobs, far surpassing the 150,000 we lost during the crash.” He said people and companies from states with high cost housing and taxes, especially California, will continue to move to the Valley this year.
Along with rising incomes, greater wealth coming to our state, and an already suppressed supply of housing, prices rise, often dramatically. Just ask San Francisco Bay Area residents how their real estate performed in both rents and home price valuation over the past ten years? It’s not pretty.
The future affordability of our state is greatly in doubt. I believe we will look back to see that 2020 will be Arizona’s turning point in real estate affordability. That much, to me, seems clear.