Phoenix was one of the hardest hit markets in all of the financial crisis. Investors loved the market and a growing population wanted to work and retire there. I’ve never been, but being from the south and being a fan of being near large bodies of water, there isn’t much appeal for me. But I know people that do love it, and they surely aren’t alone.
Just as the chart shows, Phoenix has a huge run up in prices, and then a quick fall. Things are looking better these days, in more ways than one.
In a time where we all worry about going back into another recession with some combination of low job growth, the federal government, or Europe sending us there, we need to see some stories of recovery. And Phoenix is showing what those kinds of issues are. From Bloomberg (emphasis mine):While D.J. Hughes hunts for carpenters to join his team at a Phoenix-area house-framing company, competitors are tracking down his workers at building sites and offering them more money. “Everybody is trying to pull crews from everyone,” said Hughes, 43, a project manager for J.L. Baugh Construction in Gold Canyon, Arizona, who admits to a couple attempts at poaching framers from rival contractors. “I’ve been doing this for a quarter of a century and this is the biggest shortage of skilled laborers I have ever seen.” After being decimated by the housing crash, Arizona’s builders are now scrounging for workers as demand for new homes climbs. Building permits are at an almost three-year high, creating a scarcity of framers, roofers and masons, many of whom moved elsewhere when work dried up. Laws aimed at curbing illegal immigration only added to the shortage by pushing experienced laborers out of the state.
There aren’t enough skilled workers to go around anymore. This is itself its own problem, but one much more preferable to not having jobs available. The housing market in Arizona is getting lift in a number of ways. For one thing investors have returned and are buying up properties. Low rates and government programs are making it easier for everyone to get financing, be it refinancers, investors, or new buyers. And job growth is still happening so more people are likely afford their house payments again.
Will it last? We can certainly hope. But there’s no guarantee. And with potential threats such as the 2013 fiscal cliff to the economy or any number of unknown problems lurking in the economy all we can really do is hope.
Hopefully one of the most painful housing markets recovering is a sign. No one disagreed that a recovery in housing was necessary for the economy to get a firm foothold. Whenever we had good economic reports over the last 3 years we were always cautioned that without a rebound in housing the recovery just wouldn’t be stable.