TUCSON, Ariz. (KGUN) – Arizona’s economy should continue to recover, but will recover more slowly in the coming year. That comes out from the annual economic forecast of the University of Arizona of the Eller College of Management.
The COVID pandemic had a huge impact on where people worked, lived and how they spent their money.
Demand for homes exceeded supply as people worked from home and workers who could work remotely moved to Arizona from more expensive areas like California.
Home prices were booming, and supply and labor shortages drove prices up even further. University of Arizona economist Doctor George Hammond believes that home supply will gradually catch up with demand.
“I doubt we’ll see a 20-30% increase over the course of the year. House prices go up for a very long time, but we may not see house prices, house prices are falling. We can see some sort of more normal adjustment where house prices just keep going, or grow more slowly, or flatten out as incomes catch up. “
Hammond says it’s important that property prices don’t rise so high that they deter people from moving to Arizona. These moves are one of the main reasons Arizona is growing.
Hammond says employment in Arizona is about 90% of pre-pandemic employment, but our response to the pandemic has changed where people work.
Income rose as federal stimulus payments gave people more money to spend. As people travel less, they spent more money on products they could use at home.
This inflated commercial and transportation jobs to deliver these goods, while tourism, which makes up a large part of Tucson’s economy, declined.
Hammond says the tourist slump is one of the reasons the economies in Tucson and Flagstaff have lagged behind the rest of Arizona.
However, Hammond doesn’t expect us to get any more federal stimulus money next year, and that should slow spending.
“So overall, I think we are in good shape to continue to be one of the fastest growing countries in the country. You know, Phoenix will continue to be some kind of engine of state growth. Tucson will also attend. We will see the Tucson economy continue to create jobs, population and income, but at a slightly slower pace than Phoenix. “
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