Economists believe Arizona is on the straight and narrow path to full economic recovery and may arrive there within three years. At an annual luncheon in Phoenix, experts predicted a bright economic forecast in the year ahead.
“As of September, Arizona ranked fifth among states for job growth, and the Phoenix area was fourth among large metropolitan areas,” said Research Professor Lee McPheters, director of the JPMorgan Chase Economic Outlook Center at the W.P. Carey School of Business.
Assuming the national economy does not strongly affect Arizona, the state may see as much as 2.5% growth it its employment rate next year. “Arizona is expected to add 60,000 jobs in 2013, led by professional and business services, retail, hospitality and health care,” McPheters added. “We should finally dip below 8% unemployment in 2013 - down to 7.6 %.” Arizona saw a 2% employment rate growth this year. Economists believe the state can return to pre-recession employment numbers over the next three years.
McPheters projects a 5% growth in personal income in 2013 and that single-family housing permits will jump 50% as the local housing recovery is now in full force.
Elliott Pollack, CEO of Elliott D. Pollack and Company, also commented on the local housing market. “Even though about 40% of Arizona homeowners are underwater on their mortgages, we’re starting to see a recovery,” said Pollack. “The single-family-home and apartment markets look great. Industrial real estate has improved quite a bit. Only office and retail have quite a way to go.”
Pollack noted that residential foreclosures notices dropped nearly 70% from the peak in 2008. Home prices in the Phoenix area are up 35% over the last year as well.
“By 2015, things should be normalized,” Pollack said. “As I like to say, we’re only one decent population-flow year away from the issue being resolved.”