The main long-term foundational driver in terms of housing sales volume and price support is a given region’s employment base. The following table presents historical trends and a 5-year forecast of employment and unemployment levels for the Tucson, AZ MSA:
Patterns in total non-farm jobs in this region are shown graphically in the following table:
Twelve month changes in the total non-farm job base are shown in the chart below:
As shown, this region is estimated to have lost 19,625 non-farm jobs during 2009 – an unprecedented 5.1% loss of the total non-farm job base for the biggest loss in decades. During Year 2010, an additional loss of 4,850 jobs is forecast. Thereafter, the impact from the national stimulus package will increasingly be felt, and combined with improved financial markets, should lead the national economic recovery towards regional economic expansion. By 2014, a healthy 2.6% growth rate is forecast for non-farm jobs in this region.
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Patterns in unemployment are shown below:
After reaching historic levels estimated at 7.4% unemployment in 2009, it is forecast peak at 7.5% in 2010, before gradually receding toward more normal levels thereafter.
Demographic Trends and Forecasts
The distribution of the population by age bracket in this region is shown in the chart below:
The population distribution by age compares estimates for 2009 and forecasts for 2014 with Census data from the year 2000. Changes in the population between 2009 and 2014 are more clearly shown in the next chart:
As shown, population gains are forecast for all brackets. Sizable growth is projected between 25 and 44 years - peak family formation years which will boost growth in the 5 to 14 years bracket. Growth in the 25 to 44 year age brackets will continue to be drawn to affordable housing and job opportunities. Conventional housing will perform well in select price points.
Population growth between 55 and 74 years of age will be especially intense, suggesting that move-down and age targeted/qualified housing in various forms are likely to perform relatively well once economic growth resumes. This influx of buyers into the mature housing market is significant since baby boomers now account for one-fourth of the regional population. The mature market is anticipated to perform very well in the next cycle.
Population growth between 55 and 74 years of age will be especially intense, suggesting that move-down and age targeted/qualified housing in various forms are likely to perform relatively well once economic growth resumes. This influx of buyers into the mature housing market is significant since baby boomers now account for one-fourth of the regional population. The mature market is anticipated to perform very well in the next cycle.
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Mark Boud
Real Estate Economics
