Phoenix # 1 in Home Price Hikes for 25 Consecutive Months
The US Census Bureau released franchise statistics from the 2017 Economic Census on August 26. Almost 300 different types of businesses are franchises, although the only data available at the state level is for full and limited service restaurants. Comparing Arizona to the United States, 41.6 percent of restaurants (combined total of full and limited services) in Arizona were franchise establishments, while the figure was 35.0% for the United States. Limited-service restaurants were much more likely to be franchised establishments, as 63.2 percent of limited-service restaurants in Arizona were franchises and 57.3 percent nationally. For full and limited service restaurants, the owner is more likely to be a franchisee than a franchisor.
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June was the 25the consecutive month Phoenix topped house price increases in the S&P CoreLogic Case-Shiller report, by 29.3% year-on-year. Nationally, home price increases hit a record high in June with an annual gain of 18.6 percent – the biggest increase in over 30 years. All of the metropolitan areas included in the report saw double-digit year-over-year house price increases in June, with Chicago posting the smallest increase at 13.3%. Phoenix, San Diego and Seattle were the top three regions with respective increases of 29.3%, 27.1% and 25.0%. The composite of 20 cities posted a gain of 19.1% according to the August 31 press release.
US house prices rose 17.4% year-on-year in the second quarter of 2021, making it the 40e consecutive quarter of house price increases according to the house price index of the Federal Housing Finance Agency. All states posted year-over-year price appreciation for the second quarter of 2021. The five states with the largest price increases were Idaho at 37.1%, Utah at 28.3%, Arizona at 23.9%, Montana at 23.7% and Rhode Island at 23.7%. Given that the top four states are in the mountain region, it’s no surprise that this is the region of the country with the biggest price increases. The report provides data on regions, states and the 100 largest metropolitan areas for the buying index only. The All Transaction Index, which includes purchase and refinance mortgages, provides price appreciation data for all metropolitan areas. Three Arizona subways ranked among the top metropolitan areas on the All-Transaction Index: Lake Havasu City-Kingman at 20.4%, Phoenix at 19.5% and Prescott Valley-Prescott at 17.7%. Arizona’s other metropolitan areas saw increases of 18.2% in Yuma, 16.8% in Flagstaff, 16.7% in Sierra Vista-Douglas and 15.7% in Tucson.
July unemployment rates were lower than in the same month a year ago for all metropolitan areas except one included in the September 1 metropolitan area employment and unemployment release. Only Pueblo, CO had a higher rate than a year ago. All of Arizona’s metropolitan areas had July unemployment rates several percentage points lower than a year ago (ranging from 2.9 percentage points in Sierra Vista-Douglas to 5.0 percentage points in percentage in Flagstaff). Despite a falling unemployment rate, Yuma was the metropolitan area with the highest unemployment rate in the country at 20.1%. The lowest unemployment rate among metropolitan areas was 1.8 percent in Logan, UT-ID.
The United States gained 235,000 non-farm payroll jobs in August, up from a revised, seasonally adjusted increase of 1,053,000 in July. The average monthly increase so far this year has been 586,000 according to the Sept. 3 employment situation release from the Bureau of Labor Statistics. Professional and business services followed by transportation and warehousing were the main sectors where employment increased during the month. The number of people not in the labor force decreased over the month, but was still higher than at the same time last year. The country’s seasonally adjusted unemployment rate fell 0.2 percentage point to 5.2% in August.
The US trade deficit narrowed in July to $ 70.1 billion, from a revised figure of $ 73.2 billion in June. The increase in exports combined with the decrease in imports has contributed to the reduction of the deficit in goods and services. July exports increased $ 2.8 billion to $ 212.8 billion, and imports fell $ 0.4 billion to $ 282.9 billion. Exports of goods increased by $ 2.7 billion and services increased by $ 0.1 billion according to the September 2 joint publication of the US Census Bureau and the US Bureau of Economic Analysis. Year-to-date, the goods and services deficit in July was 37.1% compared to the same period in 2020.
There were 826 bankruptcy filings in Arizona during the month of August, bringing the cumulative total for the year to 6,760, down 25.5% from the same period a year ago. The last time the August cumulative total was this low was in 2007. Since the start of the year, the Phoenix office is down 27.2%, the Tucson office is down 21.4%, and Yuma’s office by 19.6%. La Paz was the only county to have a higher number of filings since the start of the year for August compared to a year ago with 11 this year compared to 10 last year. The Phoenix office includes Apache, Coconino, Gila, Maricopa, Navajo, and Yavapai counties. The Tucson office manages the counties of Cochise, Graham, Greenlee, Pima, Pinal and Santa Cruz, while the Yuma office represents the counties of La Paz, Mohave and Yuma.
Producer prices rose 0.7 percent during the seasonally adjusted month in August according to the Sept. 10 release from the Bureau of Labor Statistics. Final demand goods were up 1.0 for the month, with a 2.9% increase in final demand food prices contributing. Final demand services increased 0.7%. The change in the unadjusted 12-month final demand index was 8.3%, the largest annual increase since November 2010 (when 12-month data was first calculated) .
Valorie H. Rice is the Senior Business Intelligence Specialist at the Center for Business and Economics Research (EBRC) at the Eller College of Management at the University of Arizona.