Real Estate Corner | Record First Quarter Due to Population, Job and Wage Increases
By Fletcher Wilcox, V.P. Business Development & Real Estate Analyst, Grand Canyon Title Agency, Inc. / Founder, The Wilcox Report
Published in Arizona Journal of Real Estate & Business
2018 Dollar Sales Volume Hits All-Time High for a First Quarter
Strong demand to own a home in the first quarter of 2018 led to the highest dollar sales volume ever for a first quarter. The previous first quarter with the highest dollar sales volume was in 2005. First-quarter dollar sales volume for both 2005 and 2018 was over $5 billion with 2018 being $445 million higher than 2005. Dollar sales volume measures the strength or weakness of a market and is calculated by adding the sale price of each sale for a total. The dollar sales volume in this report is for previously owned single-family home sales in Maricopa County, which equate to eighty percent of residential sales.
When comparing first quarter 2018 to first quarter 2017, there were 16,227 sales in 2018 which was 4 percent higher than the 15,602 sales in 2017. The median sale price in first quarter 2018 was $277,000, a 5 percent increase compared to $255,000 in 2017.
Demand to Own Fueled by Population, Job, and Wage Growth
Population Growth: According to the U.S. Census Bureau, Maricopa County was ranked the county with the greatest increase in population for the second year in a row. The population of Maricopa County increased by 73,650 in the 2017 rankings, or 202 people a day. Finishing second was Clark County, Nev., with a population increase of 47,355, or 130 per day.
Job Growth: In 2007 there were 1,865,800 people employed in Maricopa County. Three years later in 2010, there were 225,700 fewer people working. Back then, many people that lost their jobs stopped making their mortgage payments which led to foreclosures and falling home values. This is far from the situation today. In 2017, there were 325,900 more people employed than in 2010 and a growing number of employed people in need of a home creates a lot of competition for existing inventory.
Rising Wages: At the time of this writing, only wage information for Arizona as a state was available. Maricopa County is home to 71 percent of all employed workers in the state. According to the U.S. Bureau of Economic Analysis, the average state earnings for the 50 states increased 3.1 percent in 2017. Arizona earnings were above average, reporting third-highest earnings at 4.8 percent.
There is a lot of news that positively affects the Maricopa County real estate market. Population, job and wage growth should continue to increase. These increases will keep the competition among buyers for single-family homes fierce. I do expect 2018 will end as one of the best years ever for the Maricopa County real estate market.