PHOENIX, Nov. 13, 2012 /PRNewswire/ -- The Arizona economy is in recovery mode, with home prices on the rise and construction activity moving higher. Real GDP should grow at an above-average 2.5 percent this year, and hold that momentum into 2013 as the housing recovery strengthened according to the State Monitor Report by BMO Capital Markets Economics.
There is increasing evidence that the housing market has stabilized. According to the S&P Case-Shiller Index, prices in Phoenix plunged 57 percent before bottoming last September, but they have surged nearly 20 percent. This upward movement comes amid a significant drawdown in the months' supply of homes available for sale, to just 2.3 percent in Q2, or back to pre-recession levels. Arizona suffered a deep housing recession, but upward price momentum is quickly alleviating the relatively high stress on the Arizona market.
"We have seen a significant increase in the number of people inquiring about a home purchase or who are interested in refinancing their current residence," commented BMO Harris Bank Arizona President, Steve Johnson. "We know there is significant growth potential in this market which is why we have expanded our mortgage team to support our customers."
Employment growth has been relatively broad in the past year, with manufacturing, trade, finance and tourism-related sectors all contributing. Construction employment is rising again, up 2.9 percent year over year, but the level of jobs in the sector is still less than half the pre-recession peak. Employment is expanding at a solid pace, up 2.2 percent year over year in September. The jobless rate remains above average at 8.2 percent, though that is down from 9.5 percent a year ago.
Population growth was just 1.1 percent in 2011, down from a peak growth of 3.3 percent at the height of the housing boom. While net international immigration has weakened since that period, net domestic in-migration (from other states) has plunged to just above 7,000 persons in 2011 from more than 133,000 in 2006.
The full State Monitor report can be downloaded at www.bmocm.com/economics
About BMO Harris Bank
Based in Chicago, BMO Harris Bank N.A. provides a broad range of personal banking products and solutions through over 600 branches and approximately 1,300 ATMs in Illinois, Wisconsin, Indiana, Kansas, Missouri, Minnesota, Nevada, Arizona and Florida. BMO Harris Bank's commercial banking team provides a combination of sector expertise, local knowledge and mid-market focus throughout the U.S. Deposit and loan products and services provided by BMO Harris Bank N.A. Member FDIC. BMO Harris Bank(SM) is a trade name used by BMO Harris Bank N.A. BMO Harris Bank is part of BMO Financial Group, a North American financial organization with 1,600 branches, and a retail deposit base of approximately $180 billion.
SOURCE BMO Financial Group