What is the Phoenix Real Estate Forecast?
One knows that they have officially entered dork-dom, when they're hanging around on New Year's Day, waiting to hear Elliott Pollack's radio broadcast.
If you're not familiar, Elliott Pollack is a local Phoenix Economist who has been forecasting, specifically on the Phoenix real estate market, since the 1960s. Pollack has long been considered a leading expert on the Phoenix market, and I knew when I began my career in real estate that I would need to listen carefully when Pollack spoke.
When the market first plunged as the lenders failed in mid 2007, the agents who had been in the Phoenix market for 20+ years claimed that they had been through the down cycles before and they would wait it out for the year or two that it would take before the market returned.
In January of 2008, I had an opportunity to attend a luncheon where Pollack was speaking. At the luncheon, he very somberly told a room full of Realtors and loan officers who were sure that they only had a year or so more to wait, that he did not anticipate seeing signs of recovery for nearly four years. He predicted that in mid 2011 we would begin to see relief. I remember at that moment thinking that he seemed like a very knowledgeable man, but being somewhat hopeful that perhaps he was experiencing an early form of senility, which of course has proven not to be the case.
Pollack's message today was very much the same. Since I'm fairly confident that you were not hanging around on New Year's Day waiting to hear from Pollack, I will share the highlights:
•· Job creation in the Phoenix metro area will improve in 2011. We lost 80,000 jobs in 2008, an additional 160,000 in 2009, and we created 24,000 jobs in 2010. Pollack anticipates that Phoenix will create approximately 50,000-60,000 new jobs in 2011.
•· Pollack believes that new construction permits will remain very slow over the next two years while the market really moves through existing inventory.
•· According to Pollack's data, 1 in 5 (or 20%) of single family detached homes in the Phoenix metro area is a rental. He believes that there are more families in rental homes than apartments (hint, hint ~ call your investors).
•· He believes that the job creation will help bring migration back to Arizona. In years past, approximately 120,000 people annually relocated to Arizona from other states. In 2010, the figure for relocation was approximately 40,000.
•· Pollack believes that the downfall to the Phoenix economy actually began 15 to 20 years ago when we began relying more on construction and tourism for the economy than competitive exports. He is hopeful that the creation of the Department of Commerce will help correct this mistake for the future of our economy.
•· Pollack believes that the Phoenix and Tucson housing markets and economies will return first in our state, which will then spur intrastate tourism and vacation homes, fueling the economies in cities such as Flagstaff and Sedona.
•· Pollack's final advice for 2011 is rather obvious; reduce debt and increase liquid assets.
Current Conditions in the Phoenix Market:
Current Conditions in the Phoenix Market:
• There are 30,794 single family detached listings currently in MLS. That is a decrease of 391 listings over last week and the seventh week in a row of a decrease
• There are 37,818 total listings currently active in MLS, which includes condos, townhomes, patio homes and lofts.
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