Low mortgage delinquency, more jobs push Phoenix market forward
A recent report found that Arizona posted a huge drop in the amount of dangerously delinquent home mortgages, which is considered to be one of the primary factors in creating shadow inventory, according to the Phoenix Business Journal. Real estate in Phoenix is finally showing consistent improvement. There has been an increased amount of construction jobs available in the metro area, and homebuilding has doubled so far this year.
The report by CoreLogic didn’t note the exact delinquency, instead it focused on the nation’s overall shadow inventory and the fact that it fell to its lowest in more than three years during July. Between April and July, homeowners in Arizona who were delinquent on their payments dropped by 3.2 percent.
Many more people are looking to purchase brand new homes in Phoenix as well. New data from the Associated General Contractors of America show that during the past year, 6,300 new jobs in the building industry have been created. This is a very positive sign, because after the housing bubble crash an estimated 200,000 construction jobs were lost.
"For an area that was once the poster child for the construction downturn, Phoenix is finally heading in the right direction," Brian Turmail of the Associated General Contractors of America said in a statement to The Arizona Republic. "Make no mistake, though, this area's construction workforce is still just a fraction of what it was six years ago."
In the Phoenix metro area, there are roughly 90,800 people working in construction, which is up from 84,500 last year, according to the source. Other areas of the job market are improving in the Valley, even though more than one-quarter of Phoenix-area office space is vacant. Local real estate brokers told the Phoenix Business Journal that leasing activity and local job gains will help improve the commercial market. In downtown Phoenix, statistics show a 15 percent vacancy rate, which is higher than Tempe at 20 percent, Chandler at 23 percent and central and south Scottsdale at 20 percent and 21 percent, respectively. However, in midtown Phoenix, vacancy rate is at 30 percent.
According to the publication, the third quarter office report found job market gains in Phoenix in the professional services sector, which will likely spark interest in office space. There are also several known tenants looking for large spaces, such as homebuilder Meritage Homes and healthcare company Humana.