Arizona, one of the states hit hardest by the economic downturn, is still two years away from a full economic recovery, according to panel of experts at the 51st annual Economic Forecast Luncheon, co-sponsored by Arizona State University’s W. P. Carey School of Business and JPMorgan Chase.
Additionally, the panelists said that Arizona’s housing market, which was severely affected by the foreclosure crisis, is still many years from fully recovering.
Among the panelists was Elliott Pollack, chief executive officer of Scottsdale-based economic consulting firm Elliott D. Pollack and Company, who said that Arizona’s housing recovery has been slow compared to the rest of the nation.
Pollack said that there are positive indicators of the health of Arizona’s housing economy such as slow acceleration of the local economies, decent home affordability, low mortgage rates, a slight loosening of lending standards, and the movement of many all-cash investors to other bargain areas of the country.
Pollack said that all of these factors create more opportunity for local buyers who need financing, but the recovery is still slow.
“However, we still see several negatives that outweigh those positives, including relatively sluggish employment growth, fewer people moving, millennials delaying home purchases, many people still waiting out their required seven years in the credit ‘penalty box’ after foreclosures, and overall difficulty in getting home loans,” Pollack said. “Full recovery is still years away.”
Pollack did say that many Arizona residents who have been renting may jump back into the housing market over the next several years as conditions improve.
Another panelist, Research Professor Lee McPheters, director of the JPMorgan Chase Economic Outlook Center at the W. P. Carey School of Business, said that Arizona’s total economy is still lagging as well.
McPheters said that Arizona has only recovered 69% of the jobs that were lost in the recession, and noted that the expectation is that the state will recover the remaining 96,400 jobs that were lost in recession in the next 18 months.
McPheters said Arizona has experienced 2% job growth in 2014, but the state’s 30-year average is traditionally much higher at 4.2%.
On the positive side, Arizona’s rate of job growth was good enough to rank it as the 12th highest state for job growth as of October. McPheters believes the state will speed up from here.
McPheters also made several predictions for Arizona’s economy for 2015, including:
- Employment growth rising from an expected 2.2% this year to 2.5% in 2015
- Personal-income growth jumping from 4% this year to 4.5% in 2015
- Population growth rising from 1.4% in 2014 to 1.5% next year