During a recession, one of the problems facing the real estate market is the people who are moving out of state and decreasing its population.
However, Arizona has demonstrated positive growth—our population grows an average of 1.4% each year, which means that around 200 people move to Arizona every day. This will keep the demand for purchasing and renting homes high.
Another factor that affects the real estate market during a recession is the overall economy of the state. In Arizona, we’re prepared for that. Recently, the governor announced that we have a $1 billion “rainy day” fund. Additionally, the constant population growth brings in new people, who, in turn, bring new employers. This makes for a strong economy with a low unemployment rate.
For example, during the last year in Arizona, we’ve added 80,000 new jobs. When people have jobs, the median income is high, which means they can afford to rent and buy new properties.
The final factor that affects the real estate market in a recession is the number of vacant and distressed homes. In the previous recession when the real estate market was really bad, that was one of the reasons that real estate prices plummeted. However, today’s market is quite different; over the last 10 years, buyers have purchased homes with decent down payments and have built lots of equity. There’s also a high demand for rental properties. In the upcoming recession, I don’t think there will be a lot of vacant homes or distressed sellers, which will help the market.
One thing is for sure: The recession is coming. But I don’t think it’s going to be as bad as the last time. On the contrary, I think Arizona will largely be fine.
If you have any questions about this topic, please feel free to reach out to me. I’m happy to provide you with more information.