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Recession fears have little impact on Arizona’s hot housing market

The Phoenix housing market is red-hot, and despite some economic concerns nationally, a Valley economist says it won't slow it down much
Published: Apr. 21, 2022 at 5:29 AM MST|Updated: Apr. 21, 2022 at 4:05 PM MST
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PHOENIX (3TV/CBS 5) -- The odds of the U.S. entering a recession in the next two years are 35%, says one of President Biden’s favorite economists. But if it does happen, it won’t be what we saw in 2008.

“Recession risks later this year and into next are now uncomfortably high.”

“The odds that the Fed missteps, and tightens too aggressively are material and rising. Landing the economic plane on the tarmac was already going to be difficult for the Fed because of the pandemic and high inflation, but Russia’s invasion makes it more likely the economic plane hits the tarmac hard or even crashes.”

Moody’s Analytics Chief Economist Mark Zandi:

Valley economist Danny Court with Elliott D. Pollack & Company agrees with that assessment. The risk of a recession is increasing within the next 24 months. It comes amid rising interest rates, staggering inflation, and the ever-growing global conflict over Russia’s invasion of Ukraine.

So if the recession won’t look like 2008, why not? Experts say it’s because that year was an outliner when looking at it historically, and it was a housing-led recession.

Recent data shows that one-in-nine people moving in the U.S. are moving to Arizona. That’s causing a red hot housing market where supply can’t meet demand. Our state’s manufacturing industry is also growing immensely, which leads to a robust economic founding.

You’ll also notice that the Phoenix area tends to fare better than other states when looking past decades. “Arizona is a great place to be in terms of the economy. We tend to boom out of those recessions, meaning we create Jobs faster and more quickly than the U.S. average,” said Court. He says some of the indicators of an oncoming recession are when there are signs of less economic activity, like fewer business investments and less consumer spending.

So what can you do to prepare? Well, there are also signs that there won’t be a recession, at least not one that significantly impacts your day-to-day life like the one 14 years ago. Some experts say this is as good a time to buy a home as any, as realtors experts predict that price and interest rates will keep inching up. But Court notes that housing demand in the Valley might stabilize because those same interest rates will price some buyers out of the market entirely.