On July 3, 2014, fireworks were going off as many financial experts celebrated the stock market surpassing 17,000 on the floor. A week later, many were preaching caution, that the bull market was coming to an end. This is why Americans can consider economics as more of an art form than a science. A cross-section of real estate professionals, investors, and luxury homeowners from around the Valley gathered last month to ponder the Phoenix economic outlook.
Companies, like Baird, First Arizona Title Agency, Old Republic Home Protection, Village Health Clubs and Spas, Psychojock Embroidery, and Starpower, sponsored the Economic and Real Estate Mastermind seminar.
Bob Stein, currently the Chief Economist for First Trust, and former US Assistant Secretary for Economic Policy, tried to clarify the “big picture” nationwide political and economic outlook. Positive developments include growth increasing to 3%/year and unemployment decreasing. US oil imports are decreasing, and obligatory government payments sound scary, but are actually the smallest share of the economy since the 1980’s. The housing and auto markets are recovering. But the US faces serious global competition from emerging markets like China and India.
Quicken Loans was represented by speaker Bryan Burt. The nation’s largest online mortgage lender considers itself a technology company that happens to do mortgages. Its progressive customer service and human resources management approaches have earned it top ratings, as well as profits ($80 billion in loans in 2013, up $10 billion from 2012).
Jason Mitchell, who is the top producing agent under 40 in Arizona, and whose Mitchell Private Realty Group is one of the top 50 nationwide, described progress in the housing market. Short sales are decreasing; Phoenix home affordability increased from 2007’s 26% to 67+%; property values are increasing; and average payments are the same as a decade ago.
Tina Tamboer, a senior analyst, provided market insights. She described how the crash started in 2005, things bottomed out in 2010, and prices have increased since. But, due to growing inventories, the sellers’ market of the past year is giving way to a normal buyer’s market. Tamboer explained how one must be careful citing statistics/predictions in real estate, since, in a market like Phoenix, the numbers are influenced by season, type of housing and demographics (e.g., millennials are not buying, while boomerang buyers will return to the market).
So what is the future of Phoenix’s economy? It appears promising, but, as usual in economics, it depends.