MARKETS & TRENDS
HOT MARKET
Market Spotlight: Phoenix IS THIS HOUSING MARKET TURNING UP THE HEAT, OR HAVING THE NEXT MELTDOWN?
by Fred Heigold with RentRange® - A leading provider of market data and analytics for the single-family rental (SFR) housing industry
growth since the last recession. The favorable business climate with low income and property taxes have helped Phoenix become one of the fastest-growing economic markets in the country. According to the BLS MSA-lev- el Employment Report, between February and June 2020 the Phoenix MSA has lost nearly 7.6 percent or 170,900 jobs. Some job industries have been more resilient, but over- all represents a setback of nearly all jobs gained over the last three years.
POPULATION GROWTH The 2019 Census/ACS data shows the Phoenix MSA is the 11th largest MSA in the U.S. with nearly 4.95 mil- lion residents. The metro area added 100k residents between 2018 and 2019 (a 2 percent increase) and had the 4th largest five-year increase with nearly 460k new residents (a 10.2 percent gain). JOBMARKET The Phoenix MSA economy is the 16th largest in the U.S. by GDP. It has surged in population and job
The Phoenix-Mesa-Scottsdale, AZ Metropolitan Statistical Area (Phoenix MSA) has been a high-performing market and a favorite amongst investors since the last recession. It has been red hot in terms of population, job growth, rental and price appreciation over the last five years but rolling virus concerns, economic shocks, and unpredictable government stimulus have changed the dynamics of the real estate market.
Job Industries in the Phoenix MSA through June 2020 are as follows.
JUNE 2020 EMPLOYMENT
CHG VS FEB 2020 HIGH
PERCENT CHG VS FEB 2020 HIGH 5 YEAR CHANGE
5 YEAR % CHANGE
INDUSTRY GROUP
SHARE OF JOBS
Trade, Transportation, and Utilities Professional and Business Services Education and Health Services
408,000 342,000 330,800 210,900 202,700 191,000 132,700 130,100 71,300 37,400
20.5% 16.1% 14.3% 12.9%
(8,500) (29,300) (22,500) (46,200) (2,100) (51,200) (4,900) (3,800)
-2.04% -7.89% -6.37% -17.97% -1.03% -21.14% -3.56% -2.84% 1.42% -8.33% 0.00%
37,400 23,400 52,000
10.09% 7.34% 18.65% 1.59% 21.81% -6.69% 33.77% 7.61% 12.11% -0.80% 5.88%
Government
3,300
Financial Activities
8.4%
36,300
10.3%
(13,700)
Leisure and Hospitality
5.0% 6.7% 3.9% 1.7% 0.2%
33,500
Construction Manufacturing Other Services
9,200 7,700 (300)
1,000
(3,400)
Information
3,600
—
200
Mining and Logging
TOTALS
2,060,500
(170,900)
(189,000)
UNEMPLOYMENT The Phoenix MSA hit a low unem- ployment rate of 3.6 percent in De- cember 2019. Due to shutdowns, the unemployment rate spiked to a record high 12.5 percent in April, surpassing
between June and July have stalled the recovery temporarily. June un- employment has risen to 9.7 percent, partially due to large layoffs in the government sector and slowdowns from the second wave COVID-19 re-
the previous record of 10.4 percent in 2010. Reopening the economy has restored many temporary layoffs, bringing the unemployment back down to 8.3 percent in May. A 10X spike in COVID-19 cases
86 | think realty magazine :: october 2020
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