PHOENIX -- Despite a stalemate in congressional wrangling to avoid sending the U.S. over the fiscal cliff, new job and real estate numbers show positive gains for Arizona’s economy. Unemployment in the Grand Canyon State dropped for the third straight month in November.
One in seven U.S. jobs was created in Arizona last month, dropping the state’s unemployment rate to 7.8 percent. The nearly 23,000 jobs added in November were the most gained in that month since 2005.
“This economy is really poised to take off right now,” said Professor Dennis Hoffman of the Arizona State University's W.P. Carey School of Business. “I think that there’s a, as much as one chance in three, that we’re going to have really robust growth over the next couple years.”
Positive growth is also being seen in the housing market. Originally one of the hardest hit in the country, The Valley is one of the fastest rebounding. Out of the 20 largest U.S. cities, the S&P/Case-Shiller National Home Price Index shows Phoenix home values climbing the quickest, with a 20.4 percent annual growth rate.
“I have clients that have been looking for houses for six months because there's so much demand right now in Phoenix,” said Bradley Manhoff, Autobahn Mortgage LLC.
Better than expected numbers from the National Association of Realtors show existing home sales rose 5.9 percent in November, reaching the highest annual sales pace since 2009. Meanwhile, the Federal Reserve keeping interest rates artificially low benefits perspective home buyers.
“If you find something you love and you plan on keeping it for a while there’s nothing that should be stopping you at this point. Rates are so low people can afford a lot more than they would have been able to afford before,” said Manhoff. “When you can get interest rates in the low 3s on a 30 year fixed, people say that's almost free money.”
Manhoff said the so-called fiscal cliff should have little to no affect on the housing recovery.
However, Hoffman said that’s not the case for the delicate jobs market. If Congress doesn’t agree on a tax break and spending package by January 1st, Hoffman said Arizona could lose 80,000 to 90,000 jobs over the next year or two. That would more than wipe out the 60,000 jobs gained in the state since January, 2012.
“It will be very damaging to the psychology of the business and consumer right now,” said Hoffman, referring to a possible tumble over the fiscal cliff.