In the last year, Arizona was the seventh fastest growing state with an increase in population of 96,487, or about 1.45 percent, according to new numbers released by the U.S. Census Bureau.
This could be good news for a flat housing market.
But wait, there’s more …
Earlier this year, Phoenix made it as one of Penske Truck Rental’s Top 10 Moving Destinations. The list was featured on CNN Money.
And earlier this month, the National Association of Realtors named metro Phoenix as one of the U.S.’s “10 hottest housing markets to watch in 2015,” as well as ranked Tucson and Phoenix as top communities that will see continued influx of Baby Boomers in the future.
The census backs it up with numbers — nearly 100,000 people moved to Arizona from July 1, 2013 to July 1, 2014. That probably couldn’t hurt, however some of the state’s top industry professionals say the Valley could use more than just a little population growth to jump start the housing market:
Michael Orr, director for the Center for Real Estate Theory and Practice at ASU: The 1.45 percent rate is not particularly high compared to historical norms for Arizona. Population trends and birth rates have been relatively subdued for the past decade compared with 1995-2004. Net immigration has been particularly low, probably largely due to the well-publicized anti-illegal immigration legislation since 2007. Most of the population growth is occurring in central Arizona, and is occurring primarily in urban and suburban areas while rural areas are mostly losing population. Over the last 10 years the number of people per household has increased, dampening the effect of population growth. Demand from the new population seems to be predominantly for rental properties at the moment and demand for homes to buy remains well below normal. I would want to see population growth well over 2 percent before I thought we were getting back to historical norms.
Richard Merritt, president of Elliott D. Pollock & Company: We are seeing only modest in-migration to the state relative to previous recoveries due to the inability of people to move from a home with a mortgage that is underwater or from a home that has little equity. There is also uncertainty in the job market making employees less likely to move from job to job … In large part, the movement of people across the country is still locked to some extent by the bust in the housing market. Until the housing market is fully recovered, we may continue to see modest population growth in Arizona.
Jim Belfiore, president of Belfiore Real Estate Consulting: Those census growth numbers are still low. In a normal year, we would have more growth than this just in the metro-Phoenix-area alone. The growth should be a contributor to better housing starts next year, but remains well below historical levels.
Nate Nathan, president of Nathan & Associates: Many consultants and home builders in the state feel there is a bubble of buyers who have been sitting on fence and when the market turns it could bring them into the market. The population increase could tip that.