Welcome to Megapolitan Arizona!
Huh? What's that?
The Morrison Institute for Public Policy (located at Arizona State University in Tempe) has released a report on the Sun Corridor. They have designated a mega-metropolitanesque zone of commerce and intra-activity among those who live and work in an area the extends from the Mexican border past Tucson and Phoenix and ending in Prescott.
In essence- this study reports that this region will attract five million people in the next 30 years... that's double the population. In megapolitan regions (there are twenty such designated places in America) the synergistic force is growth.
- More people means more housing requirements.
- More housing means more jobs.
- More jobs means more money flowing through the economy.
- More money means more opportunists, new amenities, additional growth.
Wait... Haven't we been through this already?
The pivotal growth year for Arizona's real estate related community was 2005.
There was more demand than supply. Now there's more supply than demand.
When do we reach equilibrium?
It's my opinion that the pendulum is beginning to swing.
The Wall Street Journal shares this opinion, in "The Housing Crisis is Over" they state:
"In the past five major housing market corrections (and there were some big ones, such as in the early 1980s when home sales also fell by 50%-60% and prices fell 12%-15% in real terms), every time home sales bottomed, the pace of house-price declines halved within one or two months."
We're at that point right now... so what does that mean for Arizona?
Here's what my crystal ball says:
- Scottsdale, Tempe, Mesa and certain sections of Phoenix may be near the bottom of the market. Some areas in these cities are already registering shorter days on market and higher asking prices.
- Soon to follow will be Gilbert, Chandler and Glendale. Similar results are already occurring there.
- This renewed market strength will eventually trickle to the outskirt cities of Queen Creek, Maricopa, Surprise, Buckeye, Goodyear and Casa Grande.
- My friends from Tucson can tell you about the growth that already exists in and around this thriving area.
Sure- population will not fix everything... there are other market factors at play... but one has to consider what happens to cities as they grow. At some point scarcity- the lack of land, will begin to bring consequences. The populace will want big city amenities. Buildings will begin to grow upward. Opportunists will begin to offer big city comforts. People will begin to pay big city prices.
When is it best to buy?
When prices are low. BEFORE the crowd arrives.
Let's beat the rush!
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Chuck Willman is the founder of AZvest ... a group of investment minded individuals based in the Phoenix Arizona metropolitan area. If you're interested in homes or investment properties give him a call at 480.292.0600.
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Photo Credit: "Big City" by Alan Levine
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