Rising Arizona

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August 02, 2005

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Cost for U-Haul

Featured Major Market: Phoenix

Phoenix has now surpassed Atlanta as the largest single-family housing market in the country, with 58,865 single-family permits issued in the 12 months ending in March. Eighteen of the largest 20 Giants have operations in Phoenix, with D.R. Horton and Pulte each reportedly selling more than 5,000 homes per year in the metropolitan area.

Phoenix's economy is very strong. More than 66,000 jobs have been created in the last 12 months, and unemployment stands at 4.2 percent. People are flocking to Phoenix from all over the country. One of our favorite Web sites for tracking migration is UHaul.com, where the migration flow is readily apparent in its truck pricing. The cost to rent a U-Haul truck from Los Angeles to Phoenix is more than 7 times the cost of a return trip, and the cost to rent a truck from Chicago to Phoenix is more than 3 times the cost of a return trip (see sidebar).

Despite the significant growth in primary and active adult new home communities, builders have not been able to keep up with demand. The median resale home price in Phoenix has risen more than $53,000 in the last 3 years, to a new record high of $208,000.

Featured Up-and-Coming Market: Tucson

Tucson, which is located two hours south of Phoenix, has been growing just as fast. Single-family permits now exceed 10,000 per year in Tucson, and prices have risen $55,000 over the last three years, to a median resale price of $195,277. Job growth is also strong, with 13,300 jobs created in the 12 months ending in March. Tucson builders are expanding south, east and north into areas that have seen very little housing in the past.

While we were completing an analysis in Tucson recently, the locals seemed very concerned that a housing bubble was emerging. In addition to the incredible price appreciation that had occurred, their "warning signal" was that California developers were now moving into the area. Are they paranoid, or are their gut instincts correct? Only time will tell.

jburns@realestateconsulting.com

Top 20 Metro Areas
Employment Affordability Permits
Short-Term Outlook/Grade 1-Year Payroll Employment Growth 1-Year Growth Rate Unemployment Rate Median Resale Home Price Resale Housing Costs as % of Income Housing Cycle Barometer 12-Month Single-Family Permits 1-Year Single-Family Growth 12-Month Total Permits Total Permits as % of Peak Permits
1 Phoenix A 66,300 3.99% 4.2% $208,000 34.6% 5.6 58,865 19.2% 65,934 100%
2 Atlanta B 17,900 0.80% 4.9% $158,174 24.1% 4.9 57,744 1.6% 73,869 99%
3 Houston B+ 26,300 1.15% 5.5% $135,200 24.7% 2.9 46,034 4.8% 57,926 88%
4 Riverside-SB C 27,900 2.45% 5.0% $320,000 55.8% 6.4 42,802 16.2% 51,127 89%
5 Las Vegas A+ 59,800 7.56% 3.9% $280,000 49.2% 5.4 29,864 0.9% 34,107 83%
6 Dallas B+ 33,300 1.76% 5.5% $151,800 26.1% 2.4 29,849 4.4% 36,470 49%
7 Orlando A 45,800 4.76% 4.0% $185,950 33.9% 5.4 27,863 17.4% 34,119 96%
8 Chicago C 28,900 0.78% 6.1% $210,000 34.3% 4.5 27,144 -3.7% 37,994 89%
9 Tampa A 32,900 2.59% 4.1% $159,000 31.6% 5.5 24,135 16.4% 31,262 82%
10 Washington D.C. A+ 66,000 2.91% 3.6% $350,000 39.8% 5.6 22,904 -4.0% 30,778 81%
11 Minneapolis B 27,200 1.60% 4.5% $225,000 31.6% 6.1 19,739 -2.1% 26,740 95%
12 Charlotte A 25,400 3.33% 5.1% $150,000 26.3% 1.3 17,860 8.6% 21,230 93%
13 Fort Myers C+ 9,300 4.57% 3.4% $210,426 38.9% 7.4 17,798 65.8% 23,415 98%
14 Sacramento C 11,400 1.34% 4.9% $350,000 55.0% 6.2 17,380 -5.6% 21,010 88%
15 Denver A 24,900 2.17% 5.7% $235,000 35.3% 5.6 16,831 14.9% 21,434 74%
16 Fort Worth B+ 11,700 1.49% 5.2% $106,600 19.4% 2.5 15,595 10.8% 18,814 49%
17 Jacksonville B 15,100 2.62% 4.2% $152,000 26.7% 5.2 15,343 15.4% 21,093 97%
18 Austin B 17,500 2.65% 4.6% $154,800 28.0% 4.0 14,775 8.8% 18,254 69%
19 St. Louis C 12,900 0.98% 6.0% $142,500 25.6% 5.0 13,225 1.2% 15,152 83%
20 Nashville B+ 13,800 1.96% 4.9% $122,050 22.2% 0.8 13,186 6.5% 16,377 89%
Sources: Bureau of Labor Statistics: Census Bureau through the month ending March 2005; John Burns Real Estate Consulting


 

Cost for U-Haul

Los Angeles - Phoenix: $974

Phoenix - Los Angeles: $136

Chicago - Phoenix: $2132

Phoenix - Chicago: $700

Source: UHaul.com, 24-foot truck on July 6, 2005

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