This news item from Yahoo! caught my attention the other day – especially since they used a picture from our home town of Gilbert, AZ to emphasize their point. Their point being, that the migration from north to south in the U.S. has slowed precipitously since the eceonomic slow and housing bubble burst of 2008:
What explains the shift? The Sun Belt states, of course, were hit hard by the housing bust that helped trigger the recession and its aftermath. The early aughts housing boom was responsible for much of the growth in places like Clark County, Nev., and Maricopa County, Ariz. in the first place.
But just as important, migration as a whole, which has been on the wane for three decades, has really tailed off since the downturn began. “When times get really hard, it gets really hard for people to up and move,” Kenneth Johnson of the Carsey Institute told the New York Times. “People who might have left New York for North Carolina are staying put.”
Now I can’t speak for the folks in Florida, but it’s interesting that Yahoo! used a picture of Gilbert, Arizona since we’re actually not as hard hit as most other places around the Valley of the Sun. Is everyone around here underwater? Probably, but not nearly as bad as places south and east of here, like Queen Creek (where I’m told there are whole subdivisions with only a handful of houses occupied) and way out west in the Valley, where much of the new housing was built during the bubble. The Phoenix/Mesa/Glendale metropolitan area (and that’s a huge area, it’s not even connected) recently made #2 on the list of cities with most underwater properties.
Still, my real estate guy in the know tells me that inventories have been steadily dropping and, in some cases, the fall in house prices has actually stopped. At least in our subdivision that appears to be the case. Like I say, I can’t speak for Florida, and the Las Vegas area I doubt will ever come back because I think there’s more going on there than just the housing bubble, but I think if you’re looking long-term you have to bullish on the East Valley, for several reasons:
1. You don’t have to shovel sunshine.
2. The large Mormon population here in Gilbert (we have the 2nd largest outside of the state of Utah) contributes to less crime than you find in other areas of the Valley – especially out west where they don’t call it “The Wild West” for nothing.
3. The lack of severe weather and the dry climate is good for attracting business out here. No hurricanes and snowstorms make for a tranquil and predictable place to base one’s operations.
4. The taxes in blue states like Massachusetts, New York, and California are only going to go up in the years ahead. These states have made their beds with the public-sector unions and their pension fund requirements for years now, and they’ve reached the tipping point. Already-high taxes in those states are only going to be going up in the years ahead, because they can’t expect much, if any, help from a federal government that is as broke as they are. When, not if, California implodes economically, Arizona will be here waiting for the influx. It’s already happening.
5. The excessive building of homes during the mid-2000s will ensure a high inventory and relatively-low housing prices for new and barely-used homes here in the Valley for years to come. Not necessarily good for those who bought on the bubble or got greedy during that time, but one person’s disaster is another’s opportunity.
6. Did I say you don’t have to shovel sunshine?
Sure, the economic slow-down has slowed the migration of people from north to south, but once the economy picks back up again you can bet the migration will start back up again, and I think in earnest.
