June 2011 Summer Issue

ARIZONA’S ECONOMY
ECONOMIC AND BUSINESS RESEARCH CENTER

Don’t This Road Look Rough and Rocky
By Marshall J. Vest, Forecasting Project Director

June 1, 2011

growth to accelerate in the second half
and continue growing at almost a 3%
annual rate over the next two years.
By contrast, Arizona’s economy has been
stuck in neutral and bouncing along the
bottom since the recession officially ended
in June 2009. Only in the past few months
has evidence begun to appear that the
recovery has finally arrived.

A

rizona’s economy shows evidence
that it has finally entered the
recovery stage but serious
headwinds will restrain progress. The
most serious issue is housing (too much
inventory and falling prices). A close
second and related issue is the lack of
mobility of the population, which will
keep population growth depressed for
some time. Finally, reduced spending at
the state and local levels will subtract
significantly from aggregate demand.
Results from the 2010 Census highlight the
importance of the Hispanic population in
Arizona, which accounted for nearly half of
population growth during the past decade.

Arizona’s consumers have started to
“squeeze the trigger” on spending. Retail
sales reached bottom in June of last
year and have increased at double-digit
annual rates (seasonally adjusted) in each
of the past six months (data through
February) (Exhibit 1). Auto sales have
been particularly strong, registering
increases in the 20-30% range in recent
months as consumers satisfy the need to

replace aging vehicles. Higher gasoline
prices, which climbed in recent months
to near $4.00 per gallon, haven’t exerted
much constraint on other categories
either. Apparel sales are growing by
15-20%, general merchandise sales at
a 9-10% annual rate, and even building
materials sales are growing at double-digit
annual rates. Even furniture and food &
liquor store sales are no longer declining,
although the increases remain in the low
single-digit range. Restaurant and bar
sales also are showing increases in the
neighborhood of 20% annual rates.
Although initial unemployment insurance
claims nationwide moved upward recently,
that’s not the case in Arizona. Claims
continue to decline rapidly although
they are still much higher than normal.
Arizona’s unemployment rate fell to 9.5%

Exhibit 1: Sales No Longer Stuck On Bottom
Retail Sales, Arizona

$bil
60

seasonally adjusted annual rate and moving average

55
50

The nation’s economy is performing well,
considering a number of factors that are
challenging growth including the dreadful
situation for housing, rising prices, supply
chain disruptions from disasters in Japan,
contractionary effects of reduced state
and local government spending, and bad
weather. Consensus forecasts are for

45
40
35
99

00

01

02

03

04

05

06

07

08

09

10

11

1
4
7
9

Arizona’s Housing Market Haunted by Shadow Inventory. .  .  .  . 12
Forecast Tables. .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 17
Arizona Economic Indicators. .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 18

IN THIS ISSUE
Don’t This Road Look Rough and Rocky. .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .
2010 Census Demographic Profiles Released. .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .
The L&D Arizona Financial Index Reflects Market Resilience. .  .  .
Property Tax Shifting from Businesses to Homeowners. .  .  .  .  .  .  .

30

ARIZONA’S ECONOMY

in March, down from 10.4% at the end of
2009. Unemployment should fall another
full percentage point by year end.

Recent downward
revisions to employment
show that the jobs
recovery in Arizona
didn’t start until
September of
last year.

Recent downward revisions to employment
show that the jobs recovery in Arizona didn’t
start until September of last year. After
falling 312,000 during the recession, all of
23,500 jobs have been restored. Strong
growth in export-based manufacturing is
a key component in the nation’s recovery,
but manufacturing employment in Arizona
remains near cycle lows. After falling by
nearly 30%, or 60,000 jobs over the past
decade, manufacturing employment is now
back to a level was first attained back in
1980! Only a modest recovery is expected.
Aerospace manufacturing, buoyed by
missile production, has been the strongest
component in recent years but is now
declining and will move lower going forward
as defense spending shrinks. Computer
and electronic parts as well as nondurable
manufacturing have little upside potential.
That leaves fabricated metals and other

durables (such as biotechnology and solar) to
lead the way.
Given budget challenges at both state
and local levels, government employment
statewide has declined by an unprecedented
25,000 so far. Parents also have been
sending their children to (privately-owned)
charter schools rather than public schools.
While private educational services continues
growing at double-digit annual rates, public
school enrollment actually declined in 2009
and grew very little in 2010 (Exhibit 2).
With the ending of federal assistance, the
state cut $1.1 billion from the FY2011-12
budget. As expected, the cuts came largely
from Medicaid ($511 million) and education
(K-12 at $163 million and universities at
$198 million). Some costs also were shifted
to cities and counties. The public sector will
continue to be a drag on the economy for
the next 2-3 years.
The biggest concern and downside risk is
the continuation of falling housing prices

Exhibit 2: Public School Enrollment Has Declined
Gain

2

K-12 Annual Enrollment Gain Public Schools and Private Charters

Economic and Business Center, Eller College of Management, The University of Arizona

June, 2011 Summer Issue

and large inventory of vacant housing. The
2010 Census found 463,000 vacant houses
statewide. That’s enough to accommodate
an entire decade of population growth at
“normal” rates. During the past decade,
Arizona’s population increased by 1-1/4
million. Roughly 180,000 of the 463,000
are vacation or second homes so even if the
house was occupied, the owners are counted
in their home state and the house recorded
as vacant. Subtracting second homes leaves
roughly 280,000 or roughly 10% vacant.
Historically, “normal” vacancy rates range
between 1-2% for the entire housing stock
(and roughly 8% for apartments).
Home sales, driven by investor interest,
have strengthened in recent months in both
Phoenix and Tucson metro areas. Even so,
home prices, as measured by realtor data
and Standard & Poor’s Case-Shiller indexes,
continue to fall due to the large number of
vacant houses and the large portion (over
55% in 2010) that are distressed sales (bankowned and “short sales”).
We continue to forecast an anemic recovery
for the next 2-3 years due to the drag
from the public sector, delayed recovery in
construction activity, and lack of mobility of
the nation’s population, which will depress
migration flows and population growth.
After declining in 2010 and virtually no
change in 2011, population will grow by
a small amount in 2012. Annual growth
won’t top 100,000 until 2014 and doesn’t
exceed a 2% growth rate until 2015. We
expect a little less than million new residents
to be added over the decade of the teens
compared to a 1.25 million increase during
the aughts. Most of the growth will occur
in the latter half of the decade.
Subdued gains in population will limit
growth in other aggregate measures as
well. Employment will grow very little near
term, and it will be 2015 before job growth
tops 3%. Personal income will grow 3.3%
this year, then only 2.7% in 2012. The
payroll tax cut boosted growth this year
and will subtract next year when it expires
(contributions to social security represent a
subtraction from income). After a temporary
splurge in spending, retail sales growth will
slow next year.

>>2010 Census Highlights
Information from the 2010 enumeration of all residents continues to
become available for states and smaller geographic areas. In mid-May,
demographic profiles data was released. Here are some of the highlights.
• U.S. Census Bureau estimates of Arizona’s population predicted that the
Census enumeration would find 6,654,358 residents. The actual count
was 6,392,017, or over a quarter million shy. The 4.1% miss was the
largest “under-count” of any state.
• Maricopa and Pima Counties account for nearly all the shortfall.
Maricopa County’s 3.8 million county is 235,704 short of expectations.
In Pima County, the count is 45,023 lower than expected, putting the
resident population just below 1 million (980,263). Surprisingly, nearly
12,000 more people were counted in Pinal County than estimated with
more than 375,000 residents enumerated.
• Hispanics now account for 29.6% of Arizona’s population. That’s up
from 25.3% a decade ago. Hispanics account for 29.6% in Maricopa
County, 34.6% in Pima, and 28.5% in Pinal. The highest and lowest
proportions are in Santa Cruz (82.8%) and Apache (5.8%) counties.
• The 2010 Census counted 1,895,149 Hispanics statewide, an addition
of 599,532 since the last decennial census. During the decade, the
Hispanic population grew by 46.3%, compared to 17.3% for nonHispanics (an increase of 661,853). Therefore, Hispanics accounted for
nearly half (47.5%) of Arizona’s population growth over the decade.
• The American Indian population grew more slowly than the total
population to reach 296,529 or 4.6% of all Arizonans. Only Oklahoma
has a larger American Indian population.
• The median age of Arizonans is 35.9 years, about a year older than ten
years earlier. Seventeen percent are 62 and older.
• Arizona’s population is one of the youngest in the nation. Over a
quarter (25.5%) of Arizona’s population is under 18 years of age; only
five states have higher proportions (UT, ID, TX, AK, GA). Of the under 18
population, 43.2% is Hispanic, ranking Arizona 4th behind only NM, CA,
and TX.
• While Hispanics accounted for nearly half of Arizona’s population
growth over the decade, this demographic provided over 80% of the
growth in the under 18 population.
• Phoenix is the 6th largest city in America with 1,445,632 residents. The
city of Tucson ranks 33rd with 520,116 residents. Mesa follows closely
with 439,041 and a 38th ranking. Within Arizona, Phoenix added
the most new residents over the decade (nearly 125,000) followed by
Gilbert (98,756), Surprise (86,669), and Chandler (59,542).

www.eller.arizona.edu

3

ARIZONA’S ECONOMY

2010 Census Demographic Profiles
Released for Arizona Cities and Towns
By Valorie H. Rice
On May 12th demographic profiles from
the 2010 Census were released for Arizona
counties, cities and towns. These profiles
yield information on changes in the age of
the population, household relationships,
and housing vacancy for these smaller
geographies. The next important
information to come out of the 2010 Census
will provide data separated out by age, race,
and sex, and will be released from June
through August.

Age
The median age in Arizona is 35.9, which
is older than we were in 2000 by about
a year. While most counties in the state
grew older, some significantly so, Pinal grew

younger and Yuma stayed essentially the
same as compared to the last census. Pinal
saw the largest total population gain of all
the counties over the decade and was the
only one to see an increase in the under 18
population leaving it with a median age of
35.3 (it was 37.1 in 2000). This trend moved
the county from 11th to 8th when ranked by
median age. La Paz retained its ranking as
the oldest county with a median age of 53.9
and it was also the county that increased the
most in age, adding a little over 7 years to its
median age as compared to 2000. Coconino
replaced Apache as the youngest at 31. In
2000, the range in median age was from 27
to 46.8.( See Table 1.)

Table 1: Age Distribution Compared 2000 Census and 2010 Census
2010
Median age

Rank

2000

% Under 18

% 65 +

Median age

% Under 18

% 65 +

25.5

13.8

34.2

26.6

13.0

Arizona

35.9

Coconino

31.0

1

23.6

8.9

29.6

28.7

7.0

Graham

31.6

2

28.4

11.4

30.9

30.1

11.9

Apache

32.4

3

31.7

11.6

27.0

38.5

8.3

Yuma

33.8

4

28.2

15.7

33.9

28.9

16.5

Maricopa

34.6

5

26.4

12.1

33.0

27.0

11.7

Navajo

34.7

6

29.8

13.3

30.2

35.4

10.0

Greenlee

34.8

7

29.2

12.0

33.6

31.7

9.9

Pinal

35.3

8

26.5

13.9

37.1

25.1

16.2

Santa Cruz

35.6

9

30.7

13.1

31.8

33.6

10.7

Pima

37.7

10

23.0

15.4

35.7

24.6

14.2

Cochise

39.7

11

23.0

17.3

36.9

26.3

14.7

Mohave

47.6

12

20.6

23.3

42.9

23.1

20.5

Gila

47.9

13

21.4

23.2

42.3

25.1

19.8

Yavapai

49.2

14

19.1

24.1

44.5

21.1

22.0

La Paz

53.9

15

18.0

32.6

46.8

21.1

25.8

4

Economic and Business Center, Eller College of Management, The University of Arizona

March, 2011 Spring Issue

Households

Housing

There are 2,380,990 households in Arizona,
26.4 percent of which include someone who
is 65 or older and 33.6 percent that contain
someone younger than 18. The average
household size in Arizona is 2.63 persons,
which is just slightly smaller than the 2.64
persons seen in 2000. Apache County has
the largest households, with an average
household size of 3.1. La Paz averages 2.19
persons per household and in line with being
the oldest county; it has the most households
with a member over 65 (see Table 2).

As of April 2010, there were 2,844,526
housing units in Arizona, 83.7 percent
of which were occupied. The number of
households described earlier corresponds
to the number of “occupied housing units”.
The state as a whole has a 16.3 percent
vacancy rate which, as expected, is larger
than 2000 (13.1). Of the 463,536 vacant
housing units in Arizona, 184,327 of them
are vacation or seasonal homes. Gila, La Paz,
Navajo and Yuma counties have the largest
percentage of seasonal homes.. Most homes
are occupied by the owners and this stands
through all counties, though Greenlee is an
exception in that housing there is evenly
split between owners and renters (Tables 3
& 4).

Table 2: Household Age and Size
Total households

Percent Households
with individuals
under 18 years

Percent Households
with individuals 65
and over

Average household
size (number)

Arizona

2,380,990

33.6

26.4

2.63

Apache

22,771

42.3

27.8

3.10

Cochise

50,865

30.4

32.3

2.46

Coconino

46,711

33.1

18.8

2.69

Gila

22,000

25.3

40.1

2.39

Graham

11,120

41.4

27.7

3.01

Greenlee

3,188

37.5

23.3

2.64

La Paz

9,198

19.3

50.2

2.19

1,411,583

35.1

23.5

2.67

Mohave

82,539

24.5

39.9

2.39

Navajo

35,658

39.2

29.0

2.95

Pima

388,660

29.8

27.8

2.46

Pinal

125,590

37.0

28.8

2.78

Santa Cruz

15,437

45.6

29.5

3.05

Yavapai

90,903

22.8

39.3

2.28

Yuma

64,767

41.1

32.4

2.93

Maricopa

www.eller.arizona.edu

5

ARIZONA’S ECONOMY

Table 3: Housing Unit Status by County
Total housing
units

The state as a
whole has a 16.3 percent

Occupied
housing units

Arizona

2,844,526

Apache
Cochise

Percent owner
occupied

Percent renter
occupied

2,380,990

66.0

34.0

32,514

22,771

75.2

24.8

59,041

50,865

68.2

31.8

vacancy rate which, as

Coconino

63,321

46,711

60.9

39.1

expected, is larger than

Gila

32,698

22,000

76.2

23.8

Graham

12,980

11,120

72.7

27.3

Greenlee

4,372

3,188

50.0

50.0

in 2000 (13.1). Of the
463,536 vacant housing
units in Arizona, 184,327
of them are vacation or
seasonal homes.

La Paz

16,049

9,198

76.9

23.1

1,639,279

1,411,583

64.5

35.5

Mohave

110,911

82,539

69.9

30.1

Navajo

56,938

35,658

71.9

28.1

Pima

440,909

388,660

64.1

35.9

Pinal

159,222

125,590

76.1

23.9

Maricopa

Santa Cruz
Yavapai

18,010

15,437

67.6

32.4

110,432

90,903

70.8

29.2

87,850

64,767

69.2

30.8

Yuma

Table 4: Vacancy by Type
Percent
vacant
housing units

Percent
for rent

Percent
rented & not
occupied

Percent
for sale
only

% sold
& not
occupied

% seasonal,
recreational,
occasional use

Percent
all other
vacancies

Arizona

16.3

4.2

0.2

2.3

0.4

6.5

2.8

La Paz

42.7

3.7

0.3

2.3

0.3

33.1

3.0

Navajo

37.4

2.6

0.2

2.0

0.3

25.8

6.5

Gila

32.7

2.5

0.2

2.2

0.4

22.8

4.7

Apache

30.0

2.2

0.2

0.7

0.1

17.3

9.5

Greenlee

27.1

10.7

0.6

0.8

1.8

6.2

7.0

Yuma

26.3

2.9

0.5

1.4

0.3

18.4

2.8

Coconino

26.2

2.0

0.2

1.3

0.2

19.0

3.5

Mohave

25.6

3.2

0.1

2.7

0.4

14.7

4.4

Pinal

21.1

3.1

0.2

3.6

0.6

9.7

4.0

Yavapai

17.7

2.7

0.1

2.5

0.4

8.4

3.5

Graham

14.3

3.9

0.2

2.4

0.3

2.4

5.1

Santa Cruz

14.3

3.6

0.1

2.1

0.3

4.2

3.9

Maricopa

13.9

4.9

0.2

2.4

0.4

3.9

2.1

Cochise

13.8

3.2

0.2

1.9

0.3

3.1

5.1

Pima

11.9

4.0

0.2

1.7

0.3

3.4

2.2

...
6

Economic and Business Center, Eller College of Management, The University of Arizona

June, 2011 Summer Issue

The L&D Arizona Financial Index Reflects
Market Resilience1
By Lora Mwaniki-Lyman and Daniel Joseph Kinnear
The L&D Arizona Composite Index has
gained some ground since it was launched
in December 2010. The Index shrugged off
global economic and political uncertainties
such as the European debt woes, the
possibility of armed conflict in the Korean
Peninsula and the popular uprisings across
the Middle East, to finish off 2.4 percent
higher in March 2011 (Exhibit 1).

technology companies traded in the NASDAQ
stock exchange. The L&D Arizona Tech subindex was up 8.6 percent between December
2009 and March 2010 while companies
whose stocks are traded in the NYSE lost 1.5
percent in the same period, as indicated by
the L&D Arizona 13 sub-index.

...compared to the
broader market, both the
L&D Arizona Composite
Index and its Tech
sub-index continue to

When compared to the broader market,
both the L&D Arizona Composite Index and
its Tech sub-index continue to outperform
their market benchmarks. The L&D Arizona
Composite Index grew by a compounded
annual growth rate of 2.6 percent in the last
4 years, a faster growth rate than the S&P
Small Cap 600, which grew at 1.5 percent in
the same period (Exhibit 2).

The Index is price-weighted and tracks
the stock performance of Arizona-based
companies traded in both the NASDAQ
and NYSE. Two sub-indices assess the
performance of stocks by exchange;
The L&D Arizona 13 sub-index made up of
companies traded in the NYSE, and the L&D
Arizona Tech sub-index composed of stock
prices of companies traded in the NASDAQ.

outperform their market
benchmarks.

The Tech sub-index continued to prove that
small-cap growth companies generally lead
out of a recession. The sub-index grew at
an annual rate of 5.9 percent since 2006
compared to the NASDAQ, its market

Most of the gains in the L&D Arizona
Composite Index were driven by stocks of

Exhibit 1: L&D Arizona Composite Index Gains Ground
L&D Arizona Composite Index

160
140
120
100
80
60
40
20
L&D Arizona Composite index

L&D Arizona 13 Sub-Index

L&D Arizona Tech Sub-Index

Mar-11

Feb-11

Jan-11

Dec-10

Nov-10

Oct-10

Sep-10

Aug-10

Jul-10

Jun-10

May-10

Apr-10

Feb-10

Mar-10

Jan-10

Dec-09

Nov-09

Oct-09

Sep-09

Aug-09

Jul-09

Jun-09

May-09

Apr-09

Mar-09

Feb-09

Jan-09

0

1
The Economic and Business Research Center does not offer any financial advising or recommend that investment decisions be based purely on the performance
of the L&D Arizona Composite Index and sub-indices. Therefore, investment decisions are the sole responsibility of the reader.

www.eller.arizona.edu

7

ARIZONA’S ECONOMY

benchmark, which grew by 2.7 percent
within the same period. More than 80
percent of the companies in the Tech subindex have a market capitalization of less
than $2 billion.

The L&D Arizona Composite Index and its
Tech sub-index bring into the limelight
Arizona’s exceptional high-tech cluster
industries and strong manufacturing base
(Exhibit 3).

Arizona’s mainstream companies stocks
traded in the NYSE did not perform well
over the last 4 years but still managed to
outperform their market benchmark. The
L&D Arizona 13 sub-index contracted at
a compounded annual growth rate of -1.2
percent since 2006, beating the S&P 500 and
DJIA which shrank at -2.7 and -1.7 percent
respectively.

The L&D Arizona Composite Index is heavily
weighted in manufacturing stocks (57
percent), with companies in the Computer
and Electronic Products category accounting
for 25 percent of the firms in the index.
It is not surprising that this category also
featured as Arizona’s top export category in
2010.

Exhibit 2: Arizona’s Mainstream Companies Outperform Market Benchmark
2007

2008

2009

2010

13.7%

-15.5%

-2.9%

2.6%

-16.6%

-27.7%

-8.7%

-1.2%

42.4%

-5.4%

2.1%

5.9%

DJIA

4.6%

-14.9%

-5.3%

-1.7%

S&P 500

2.2%

-18.9%

-7.2%

-2.7%

NASDAQ Composite

7.7%

-17.9%

-1.6%

2.7%

S&P Small Cap 600

-2.2%

-17.4%

-5.2%

1.5%

L&D Arizona Composite
L&D Arizona 13 Sub-index
L&D Arizona Tech Sub-Index
Major Indices

Exhibit 3: Company Breakdown by NAICS Industries
Goods Producing
21

70%
Mining

4%

23 Construction

9%

31-33

Manufacturing

Service Providing

30%

22 Utilities

9%

42 Wholesale Trade

9%

44-45

Retain Trade

4%

48-49

Transportation and Warehousing

9%

Data Source: Yahoo Finance and EBR

8

57%

Economic and Business Center, Eller College of Management, The University of Arizona

June, 2011 Summer Issue

Property Tax Shifting from Businesses to
Homeowners: A Historical Perspective
Alberta H. Charney, Ph.D.
Although many taxpayers have the
perception that that their property taxes
are increasing but they are getting less in
terms of public services, few understand that
changes in tax codes over the last 30 years
have actually shifted property tax burden
from businesses to individuals. Taxpayer
voters are, in fact, paying a higher share of
total property taxes being levied than they
used to.

Property Tax Computation
In general, each taxing jurisdiction
determines the amount of property taxes to
levy, then divides the levy by the net assessed
value within the jurisdiction to determine the
property tax rate. Rates are summed across
jurisdictions and property owners pay a tax
amount equal to the combined rate (dollars
per $100 assessed valuation) times the net
assessed value of their property.
In Arizona, property tax implementation is
somewhat more complicated than this. In

addition to the full cash value, each property
also has a limited cash value. While the full
cash value is related to, but usually less than,
the market value of the property, limited
cash value is a legislated value that is limited
in its growth rate during periods of high
housing inflationary periods.
The two valuations have different tax rates
associated with them. The limited cash value
is used with primary tax rates, which are
established by each jurisdictions. Although
primary tax rates are technically not limited,
the growth of the resulting tax levy amount
is limited by statute for each jurisdiction. In
cases where voters approve additional tax
levies, the full cash value is used along with
voter-approved secondary tax rates. The
total tax bill is the sum of primary taxes and
secondary taxes for all jurisdictions.

Assessment:Sales Ratios
Tax rates are not applied to directly to
full cash value or to limited cash value.

Exhibit 1: Legislated Assessment:Sales Ratios Have Dramatically Changed Over Time
70.0%
60.0%
50.0%
40.0%

Assessment:Sales Ratios for Selected Property Classifications

Owner-Occupied Residential
Rental Residential
Mines
Utilities
Commercial/Industrial

30.0%
20.0%
10.0%
0.0%

www.eller.arizona.edu

9

ARIZONA’S ECONOMY

The consequence
of the falling
assessment:sales ratios
for Mines, Utilities
and Commercial/
Industrial properties
is that the share of
total net assessed
valuation attributable to
residential property has
been increasing.

Rather, these are converted to Net Assessed
Value and Limited Net Assessed Value by
multiplying by legislated assessment:sales
ratios. Assessment:sales ratios vary across
the following eight different property classes:
Owner occupied housing, Rental occupied
housing, Mines, Utilities, Commercial/
Industrial, Vacant land, Agriculture, and
Railroads. There are additional classes, such
as historical property, that are ignored in this
discussion.

to the ratio for Owner-occupied residential
property. Although the ratios for Railroad
property also fell from 60% to converge
with Commercial/Industrial properties, the
amount of assessed value represented by
this category is very small so it was omitted
from the graph. In addition, Agriculture
and Vacant land property categories were
omitted from the graph because their
assessment:sales ratios have been held
constant at 16% since FY80/81.

Legislated assessment:sales ratios have
dramatically changed over time (Exhibit
1). Assessment:sales ratios for Mines
and Utilities, which were 60% and 50%,
respectively, in fiscal year FY77/78,
converged with the ratios for commercial
and industrial properties by FY 99/00. The
assessment:sales ratio for Mines, Utilities
and Commercial/Industrial property are
scheduled for additional reductions through
FY 15/16, as shown in Exhibit 1. Between
FY 77/78 and FY 95/95, the ratio for Rental
residential declined from 27% to 10%, equal

Shares of Assessed Value

Exhibit 2: Residential Portion Nearly Doubles in 3 Decades
Share of Arizona Net Assessed Valuation:
Residential vs. Mines, Utilities & Commercial/Industrial
70.0%
60.0%

The shares of net assessed valuations shown
in Exhibit 2 are statewide numbers and
therefore do not represent any particular
jurisdiction. The actual share of assessed
valuation attributable to residential depends
on the mix of property classifications in
each jurisdiction. Rather, it is intended
to demonstrate the general shift in tax
burden from Residential to non-residential
properties.

50.0%
40.0%
30.0%
20.0%
10.0%
0.0%

The consequence of the falling
assessment:sales ratios for Mines, Utilities
and Commercial/Industrial properties is that
the share of total net assessed valuation
attributable to residential property has
been increasing. Exhibit 2 presents total
residential net assessed value (both Owneroccupied and Rental residential) and
compares that to the sum of the assessed
value of Mines, Utilities and Commercial/
Industrial. The share of net assessed value in
Residential increased from 31.5% in FY 77/78
to 53.8% in FY 10/11 and the corresponding
share of Mines, Utilities and Commercial/
Industrial declined from 60.4% to 35.8%
over the same period1. The proportion of
total state net assessed value attributable
to residential almost doubled over three
decades because of these legislated changes
in assessment:sales ratios.

Residential (Owner-occupied and Rental)l
Mines, Utilities & Commercial/Industrial

Potential Mitigating Factors
An important tax break for homeowners,
known as Additional State Aid to School
Districts ARS§15-972 or, more commonly,
the Homeowner’s Rebate, reduces property
taxes paid by owners of owner-occupied

These percentages do not total to 100% because of the omission of Railroad, Vacant and Agriculture property classes.

1

10

Economic and Business Center, Eller College of Management, The University of Arizona

June, 2011 Summer Issue

residential property. Initially enacted by
Laws of 1980, the rebate to homeowners was
set at 45% of owner-occupied residential
school district primary property taxes. The
rebate percentage increased to a maximum
of 56% beginning in FY 83/84, then was
reduced by 6% in FY 90/91 and reduced
an additional 5% per year until completely
phased out. Instead, when it reached 35%
in FY 94/95, the phase-out was discontinued
and the 35% ratio was maintained until FY
05/06, when it began increasing 1% per year
until it reached 40%, which is its current
level (Exhibit 3).
In 1988, the maximum size of the rebate
for a given residential property was limited
to $500. This limit was increased by $20
per year beginning in 2006 until it reached
the current maximum of $600. The rebates
are also implicitly limited in that they are
computed on school district primary property
taxes collected locally by school districts net
of state-provided Equalization Assistance or
“Basic State Aid.”
The Homeowner’s Rebate clearly reduces
taxes paid by homeowners, but it doesn’t
reduce the shift of tax burden from
businesses to residential. Rather, because
the current 40% rebate is below the 45%56% that existed between FY 80/81 and
FY 89/90, the changes in the rebate have
enhanced the shift in property tax burden
toward residential property rather than
mitigating it. Had it been completely phased
out as had been legislated in FY90/91,
the shift in tax burden toward residential
property would have accelerated.
A provision in the Arizona constitution
that limits the amount of property tax that
can be collected from residential property
each year to 1% of the limited value of the
property may mitigate the shift of property
taxes to homeowners in some jurisdictions.
After calculating the amount of the
homeowner’s rebate, it must be determined
for each residential property whether or
not the resulting total primary property
tax levy exceeds 1% of the limited value
of the property. If the 1% is exceeded, the
homeowner only pays a primary tax bill of

1% of limited cash value and the additional
is paid by the state to the local school
district in the form of additional state aid.

Conclusion
Although it can be argued that, for economic
efficiency, all property should be taxed in
a similar manner, most taxpayers do not
understand the shift in the property tax
burden from business property to residential
property that has occurred over the past
three decades.

Exhibit 3: Homeowner Rebate Was Initially Set at 45%
Homeowner’s Rebate, Percentage of Primary School
District Tax Levy
60%
50%
40%
30%
20%
10%
0%

...the changes in the rebate have enhanced the shift in
property tax burden toward residential property
rather than mitigating it.

www.eller.arizona.edu

11

ARIZONA’S ECONOMY

Arizona’s Housing Market Haunted by
Shadow Inventory
By Lora Mwaniki-Lyman and Ruth Christopherson

Introduction
EEconomic data released in the month of
May confirmed that the housing market in
Arizona has not hit bottom yet. Building
starts and permits remain at record lows and
average home prices attempt to stabilize
amidst a fragile economic recovery and
foreclosure market. Home prices in the
Phoenix metro area as measured by the S&P/
Case-Shiller Home Price Indices1, dropped
for the 10th consecutive month in March
2011 reporting an 8.45 percent decline since
a year ago. At the national level, residential
home prices dropped to their lowest level
since mid 2002 after experiencing a shortlived rise in home prices in 2009 and 2010
attributed to the housing market targeted
stimulus.
In the last two years, the federal government
has injected over $1 trillion into the
economy through spending, tax-cuts,
incentives and entitlements among other
programs. The overall goal of the bills

was to stimulate a job-based recovery by
inducing consumer spending and promoting
investment. The only stimulus directly aimed
at the housing market was Federal Home
Buyer Tax Credit.

Federal Home Buyer Tax Credit
IIn an effort to stimulate the housing market,
Congress passed the Federal Home Buyer Tax
Credit included in the Housing and Economic
Recovery Act of 2008. The 2009 American
Recovery and Reinvestment Act expanded
the first-time homebuyer credit by increasing
the credit amount from $7,500 to $8,000 for
purchases made in 2009 before December
1 while the Worker, Homeownership, and
Business Assistance Act of 2009 expanded
the deadline from December 1, 2009 to May
1, 2010. The Home Buyer Tax Credit provided
eligible individuals with a financial incentive
to buy a home now instead of later. First
time home buyers were eligible for a tax
credit equal to 10 percent of the purchase
price of a house, with a maximum credit of

Exhibit 1: Tax Credit Bumped Up Home Prices in Phoenix Metro Area
Phoenix MSA –Total and Single Family Units Average Prices
January 2001 to March 2011

400
350
300
250
200
150

Total Average Prices

Single Family - Average Prices

100
2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Source: Arizona Regional Multiple Listing Service
1
S&P/Case-Shiller Home Price Indices are the leading measure of U.S. residential home prices. The indices capture about 75 percent of nation’s residential home
stock by value. There are a total of 23 S&P/Case-Shiller Home Price Indices: the S&P/Case-Shiller U.S. National Home Price Index, a quarterly index that tracks
the nations home prices; 20 Metro Area Indices that track single-family home prices in 20 select cities; and the 10-cities and 20-cities S&P/Case-Shiller composite indices calculated from the 20 metro areas tracked.

12

Economic and Business Center, Eller College of Management, The University of Arizona

June, 2011 Summer Issue

$8,000. Repeat home buyers were eligible
for a similar 10 percent of the purchase
price of a house, with a maximum credit of
$6,500. Buyers qualified for the tax credits
if a binding contract was signed between
November 7, 2009 and April 30, 2010 with
a closing date no later than September 30,
2010. One positive effect on the housing
market that ended with the Federal Home
Buyer Tax Credit on April 30, 2010 was
the temporary increase in the demand for
houses, both new and resale.
Coupled with the historically low home
prices and mortgage rates, the Home Buyer
Tax Credit gave sidelined home buyers the
extra push they needed to purchase one
of the biggest assets in their portfolio in
an uncertain economic environment. The
increased demand for homes was expected
to reduce the inventory of distressed homes
in the market and encourage a flattening of,
if not an upward movement in, home prices.
During the time the Tax Credit was in effect,
average single family home prices in the

Phoenix metro area bumped up 10.1 percent,
from $179,000 in November 2009 to a new
peak of $197,000 in January and later in
May 2010 to coincide with the Home Buyer
Tax Credit deadline extension. Average home
prices (both single and multi-family) in the
Tucson metro area remained flat (Exhibit 1).
The Arizona Regional Multiple Listing Service
reported a 2.2 percent increase in home sales
in the second quarter of 2010 compared to
the same period in 2009 for the Region2 it
covers.
The foreclosure market in Arizona showed
some anomalies during this period as well.
While it was expected that home inventories
would decline, the exact opposite happened.
In the three months between October 2009
and January 2010, over 7,000 houses were
entered into the foreclosure process and this
was not a typical Holiday effect. According
to RealtyTrac Inc. which maintains one of the
largest and most comprehensive databases of
foreclosure and bank-owned properties with

Exhibit 2: Arizona Foreclosure Filings Spiked in October 2009
Phoenix MSA –Total and Single Family Units Average Prices
January 2001 to March 2011

25,000

300%
21048

20,000

250%
200%

15,000

13345

150%
100%

10,000

50%
5,000

0%
-50%

Jun, Oct, Feb, Jun, Oct, Feb, Jun, Oct, Feb, Jun, Oct, Feb, Jun, Oct, Feb,
2006 2006 2007 2007 2007 2008 2008 2008 2009 2009 2009 2010 2010 2010 2011
Total Filings

% Change, last 12 months

Data Source: EBRC and RealtyTrac Inc.

1

The Arizona Region includes: Phoenix, Scottsdale Area, SouthEast Valley, West Maricopa and Western Pinal Associations.

www.eller.arizona.edu

13

ARIZONA’S ECONOMY

nation-wide coverage, foreclosure activities
in Arizona spiked from 13,345 foreclosure
filings in October 2009, the lowest since June
2008, to a new peak of 21,048 foreclosure
filings in January 2010 (Exhibit 2). Total
foreclosure filings include default notices,
auction sale notices and bank repossessions.
It seemed as though houses had appeared
from the shadows – a real possibility since
a shadow inventory of bank-owned houses
that have been pulled out of the market has
been building up.
The short-term stimulus to the housing
market had succeeded in raising home prices
as well as bringing houses in the foreclosure
process back into the formal market for
clearing. There is fear however that the
market may lose its momentum now that the
homebuyer tax credit is expired, mortgage
rates are rising and other economic stimulus
programs are coming to an end.

Shadow Inventory
Shadow inventory is the inventory of homes
that could enter the market in the near
future and includes distressed properties of
unlisted foreclosed homes, unlisted bankrepossessed homes, or any home whose
principle borrowers are 90 days late on a
mortgage payment.
According to a study by Selma Lewis3,
a Research Economist at the National
Association of Realtors (NAR), the amount
of shadow inventory in the United States
through January 2010 was estimated at
over 2.4 million homes. The estimates of
shadow inventory uses the share of seriously
delinquent homes (60+ days delinquent)
that are already in the foreclosure process
by the fourth quarter of 2009. These
estimates are based on Lender Processing
Services (LPS) roll rates4. It excludes
from the inventory of delinquent homes;

Exhibit 3: Could Take Arizona Nine Months to Clear Inventories at Today’s Sales’ Prices.
Top 20 States Shadow Inventory, 2010

441,461

Florida
California
Illinois
New York
Texas
New Jersey
Ohio
Michigan
Georgia
Pennsylvania
Arizona
Washington
Maryland
Indiana
North Carolina
Nevada
Tenessee
Virginia
Missouri
Minnesota

60,286

-

50,000

100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000 500,000

Source: National Association of Realtors
3
4

Selma Lewis ““Foreclosing” on 2009, Part II: Shadow Inventory,” Real Estate Insights, March 2010.
Roll rates is the percentage of loans that will ‘roll’ into the next stage of the foreclosure process.

14

Economic and Business Center, Eller College of Management, The University of Arizona

June, 2011 Summer Issue

24 percent of distressed homes in the
foreclosure process that are already in the
market, and 75 percent of delinquent loans
under modification, and adds 75 percent of
lender-owned properties (REOs) not on the
market. Hence shadow inventory estimates
by NAR differ significantly from shadow
inventory estimates by other agencies that
do not adjust for delinquent loan under
modification, distress-home sales, ROEs
among others. According to the study, Florida
is reported to have the highest shadow
inventory numbers at 441,461 homes,
followed by California (227,961) and Illinois
(121,226). These top three states account
for 35.4 percent of total estimated shadow
inventories in the U.S. while the top ten
states accounted for a total of 62.2 percent.
Arizona fell right behind the top ten
estimated states for shadow inventory,
ranking in at 11th with a total of 60,286
shadow inventories estimated by the
National Association of Realtors for 2010.
Arizona accounted for 2.7 percent of total
shadow inventories estimated for the
U.S. Arizona reported a large amount of
foreclosures in 2010, with 55 percent of
all existing home sales in the state being
distressed sales. Assuming only shadow
inventory properties would be sold NAR
estimates it would take Arizona nine months
to completely clear the total amount of
shadow inventories at today’s sales prices.
While Arizona is ranked among the top five
states for foreclosure processes by RealtyTrac
Inc., and the top fifteen for shadow inventory
by NAR, the state is doing relatively better in
terms of getting rid of distressed properties.
According to the NAR Study, Arizona’s
shadow inventory seems to be moving
relatively faster through the pipe lines and
makes up a large share of existing sales
(Exhibit 3).
The rate at which the shadow inventory
clears is dependent on the number of
borrowers who are becoming 90 days
or more delinquent on their mortgage
payments. Even though the economy appears
to be in recovery, the delinquency rate
6
7

remains high. The Federal Reserve5 reported
a 10.23 percent delinquency rate for all
real estate residential bank loans in the 1st
quarter 2011. This was a decline from an
all-time high of 11.34 percent reported in
the 2nd quarter 2010. According to a study
by Standard and Poor’s Ratings Services7
estimates, the principle balance of the
National shadow inventory - residential
properties that are 90 days delinquent, are
in the foreclosure process or are real estate
owned but not yet on the market - stood
at 433 billion in 1st quarter 2011, a drop
from 450 billion dollars in the 4th quarter
2010. The amount of homes they estimate as
shadow inventory, which does not account
for delinquent loans that may not end up in
the market, would take 52 months to sell at
current home sales prices. The effects of the
shadow inventory will be to depress home
prices. When the large build-up of shadow
inventory hits the market, the number of
sellers will once again outweigh the number
of buyers. Another concern is large amount
of mortgages established during the peak
of the home-sale bubble in 2006, which
are scheduled to be reset in 2011. The fear
is that the bottom has not been reached
and there could possibly be worse times for
the housing market ahead as the influx of
shadow inventory floods an already saturated
housing market.

In February 2011
(in Arizona), one in
every 178 households
was involved in the
foreclosure process
compared to the
national average of one
foreclosure for every
577 households.

Robo-signing Controversy
It is debatable how effective the tax credits
were in the long-run since by September
2010 banks had succeeded in muddling up
the housing market again. Word that banks,
overwhelmed with paperwork, had been
signing off on foreclosures without verifying
the information on the documents led to
bank-led and congressional investigations. As
a result, several banks, including GMAC, Bank
of America, Ally Financial and JP Morgan
Chase, imposed a moratorium on foreclosure
sales in October 2010. This led to a sharp
decline in the number of foreclosure filings
reported by RealtyTrac Inc. nationwide as
well as in Arizona. As described by RealtyTrac
inc., foreclosure activities in Arizona dropped

“First Quarter Shadow Inventory Update: Relief is Further Away, But There is Light at the End of the Tunnel,” May 2011, Standard and Poor’s Rating Services
2010 Year End and Q4 Foreclosure Sales Report, Press Release, February 2011, RealtyTrac Staff

www.eller.arizona.edu

15

ARIZONA’S ECONOMY

from 16,538 in October 2010 to 10,384
foreclosure filings in November 2010 after
the moratorium on foreclosures was imposed.
This resulted in a drop in Arizona’s ranking
by foreclosure rates from 3rd in October
to 4th in November 2010; it’s lowest since
November 2009. It is not exactly understood
how the effects of the controversy continues
to affect the non-judicial and judicial
foreclosure process in Arizona, however
as a whole, foreclosure activities are back
on the rise as banks resume processing
foreclosure sales. By December 2010 Arizona
had returned to ranking the 2nd highest in
foreclosure rates.

Arizona’s Foreclosure Market
According to RealtyTrac Inc. data, Arizona
has steadily ranked 2nd in foreclosure
rates over the last three months, after
relinquishing the position in August last
year. In February 2011, one in every 178
households was involved in the foreclosure
process compared to the national average
of one foreclosure for every 577 households.
This meant that 15,485 households in
Arizona received a foreclosure filing.
However, this was a decrease of 1.7 percent
since January and 7.4 percent compared to
February of last year.
The foreclosure market is exceptionally large
in Arizona with over half of homes sold in
Arizona’s housing market being distressed
homes. According to RealtyTrac Inc., Arizona
recorded the second highest percentage of
foreclosure sales in 2010. 55 percent of all
residential sales in Arizona for 2010 were
foreclosure sales, a decline from 54 percent
in 2009. The share of foreclosure sales to
residential sales for the fourth quarter 2010
were 55 percent, compared to 46 percent in
the 4th quarter of 2009. According to James
J. Saccacio , the CEO of RealtyTrac Inc.,
fourth quarter and 2010 total foreclosures

could have been higher if the foreclosuredocumentation controversy and expiring
home-tax credit had not slowed down the
sale of foreclosed homes towards the end of
the year.
While 2011 will continue to be plagued by
the foreclosure crisis as the housing market
tries to clear the shadow inventory of houses
and employment hopefully kicks into gear,
the general long-term trend indicates that
foreclosures are on the decline. In 2010, the
total number of foreclosure filings reported
by RealtyTrac Inc. dropped by 4 percent
compared to 2009. However, the level of
foreclosure filings in Arizona still remained
the third largest in the nation with Arizona
registering 155,878 foreclosure filings in
2010 and ranked 2nd among all states in
foreclosure rates for the second year in a
row. The Phoenix-Mesa-Glendale Metro
Area ranked 4th in foreclosure rates in 2010,
with 124,720 foreclosure filings reported.
The metro area also reported 55,372 bank
repossessions in 2010, the largest number of
bank repossessions (REOs) among all metro
areas and 17 percent more than 2009. The
Tucson metro area recorded a total of 14,480
foreclosure filings in 2010 and was ranked
38 in 2010 by foreclosure rates by RealtyTrac
Inc., up from 41 in 2009.RealtyTrac Inc.
tracks 206 metro areas in the nation.
Arizona’s high ranking in foreclosure rates
implies that the state’s housing market is still
in critical condition. Arizona continues to be
second only to Nevada for foreclosure filings,
which has topped the nation in foreclosures
for 50 months. Arizona’s housing market
was among the first in the nation to crash
and continues to be deeply affected by its
aftershock. Therefore, it will probably take
Arizona’s housing market longer than the
national average to recover.

Arizona continues to be second only to Nevada for foreclosure
filings, which has topped the nation in foreclosures for 50 months.
Arizona’s housing market was among the first in the nation to crash and
continues to be deeply affected by its aftershock.
16

Economic and Business Center, Eller College of Management, The University of Arizona

June, 2011 Summer Issue

Forecast Tables
2010

2011

2012

2013

2014

223,789.4

231,110.7

237,451.6

247,848.1

261,684.2

2.2

3.3

2.7

4.4

5.6

43,866.9

46,635.2

48,594.0

52,069.0

55,786.3

1.2

6.3

4.2

7.2

7.1

2,381.8

2,367.3

2,382.6

2,423.5

2,474.3

-2.0

-0.6

0.6

1.7

2.1

6,392.0

6,365.0

6,360.6

6,398.5

6,472.3

-0.6

-0.4

-0.1

0.6

1.2

12,641.0

10,711.3

13,283.5

20,835.0

29,827.7

-11.4

-15.3

24.0

56.8

43.2

Phoenix-Mesa MSA

2010

2011

2012

2013

2014

Personal Income ($mill)

153,347.5
2.0
30,526.8
2.4
1,679.1
-2.6
4,192.9
-0.9
8,195.0
-11.6

159,405.9
4.0
32,271.3
5.7
1,671.6
-0.5
4,159.0
-0.8
7,215.1
-12.0

164,335.0
3.1
34,291.8
6.3
1,684.1
0.7
4,159.8
0.0
10,472.3
45.1

171,480.5
4.3
36,676.4
7.0
1,712.2
1.7
4,190.1
0.7
15,800.4
50.9

181,171.4
5.7
39,161.9
6.8
1,756.7
2.6
4,251.4
1.5
23,054.4
45.9

2010

2011

2012

2013

2014

35,073.8
1.6
6,449.2
-1.5
352.8
-2.5
980.3
-1.1
2,145.0
0.8

36,372.0
3.7
6,736.1
4.4
351.1
-0.5
974.9
-0.5
1,973.2
-8.0

37,503.5
3.1
7,139.3
6.0
353.7
0.7
977.1
0.2
2,290.8
16.1

39,346.9
4.9
7,726.6
8.2
358.8
1.4
984.9
0.8
4,132.4
80.4

42,089.0
7.0
8,451.5
9.4
369.2
2.9
1,000.9
1.6
6,918.1
67.4

Arizona
Personal Income ($mill)
% change
Retail Sales ($mill)
% change
Non Farm Employment (000s)
% change
Population (000s)
% change
Residential Permits (units)
% change

% change
Retail Sales ($mill)
% change
Non Farm Employment (000s)
% change
Population (000s)
% change
Residential Permits (units)
% change

Tucson MSA
Personal Income ($mill)
% change
Retail Sales ($mill)
% change
Non Farm Employment (000s)
% change
Population (000s)
% change
Residential Permits (units)
% change

>>Need More?
Do you need more detailed and comprehensive forecast data and analysis? Learn about the benefits of becoming a
Forecasting Project sponsor. Forecasting Project sponsorship allows your company or organization to access an in-depth
menu of economic forecasting and consulting services, as well as, quarterly forecast update meetings. Contact Marshall
Vest at mvest@eller.arizona.edu or call 520.621.4075.
Forecasting Project is a community-sponsored research unit within the Economic and Business Research Center
producing quarterly economic forecasts for Arizona and its metro areas. These forecasts are recognized as among the
most accurate in the Western states.

www.eller.arizona.edu

17

ARIZONA’S ECONOMY

Arizona Economic Indicators
Arizona Monthly Data
Civilian Labor Force (000s), OSPB

Dec 10

Jan 11

Feb 11

Mar 11

Apr 11

3,165.5

3,164.6

3,164.7

3,181.7

3,177.5

9.6

9.6

9.6

9.5

9.3

Unemployment Rate, Seas. Adj. (%)
Total Non Farm Employment (000s), OSPB & EBR
Aggregate Retail Sales,($000s), ADOR

2,407.7

2,363.2

2,388.0

2,397.3

2,414.5

7,460,329.0

5,940,603.0

6,339,413.0

7,118,238.0

...

Total New Residential Permits (units), Census C-40

Arizona Quarterly Data
Population (000s, seas adj), ADHS & EBR

809

697

1,056

1,241

1,007

10 I

10 II

10 III

10 IV

11 I

6,407.0

6,397.0

6,388.0

6,380.7

6,374.4

11.3

10.5

9.7

9.8

10.1

Natural Increase

220,882

222,851

225,042

226,382

228,988

Total Personal Income ($mil, SAAR) BEA & EBR

Net Migration

34,475

34,837

35,229

35,479

35,923

Per Capita Personal Income ($, SAAR) EBR

45,018

45,235

45,864

46,279

...

Average Wage Per Employee, Annual Rate ($) EBR

44,806

44,544

44,576

44,922

...

Dec 10

Jan 11

Feb 11

Mar 11

Apr 11

219.2

220.2

221.3

223.5

224.9

1.50

1.63

2.11

2.68

3.16

222.1

223.2

224.4

226.6

227.8

Dec 10

Jan 11

Feb 11

Mar 11

Apr 11

Northern Arizona

974,337

680,563

634,661

671,108

1,198,196

Southern Arizona

220,254

205,331

255,406

342,523

647,292

Persons

1,756,915

1,962,556

1,728,738

1,575,304

...

Vehicles

572,791

622,951

592,131

524,834

...

Inflation and Prices
U.S. Consumer Price Index - All Urban Consumers
All Items (1982-1984=100) BLS
U.S. Inflation Rate
Western States Consumer Price Index - All Urban
Consumers (1982-1984=100) BLS

Arizona Travel and Tourism
Visits to Parks & Other Recreational Areas, NPS & ASPB

Total International Border Crossings, USBCBP

SOURCES AND ABBREVIATIONS
ADES: Arizona Department of Economic Security
ADHS: Arizona Department of Health Services
ADOR: Arizona Department of Revenue
ADOT: Arizona Department of Transportation
ARMLS: Arizona Regional Multiple Listing Service
ASPB: Arizona State Parks Board
BEA: Bureau of Economic Analysis, U.S. Department of Commerce
BLS: Bureau of Labor Statistics, U.S. Department of Labor
Census C-40: U.S. Census Bureau, U.S. Department of Commerce

EBR: Economic & Business Research Center,
The University of Arizona
OSPB: Office of Strategic Planning and Budgeting (Arizona)
PSHIA: Phoenix Sky Harbor International Airport
SAAR: Seasonally adjusted at annual rates
TAR: Tucson Association of Realtors
U.S. Bankruptcy Court: District of Arizona
USCBP: U.S. Customs and Border Protection, U.S. Department
of Homeland Security

* All Aggregate Retail Sales figures reported by EBR include retail, food, restaurant & bars and gasoline sales.
Source: Economic and Business Research Center, Eller College of Management, The University of Arizona.

18

Economic and Business Center, Eller College of Management, The University of Arizona

June, 2011 Summer Issue

Arizona Economic Indicators
Phoenix-Mesa-Glendale MSA - Monthly
Civilian Labor Force (000s), ADOC & EBR
Unemployment Rate, Seas. Adj. (%)
Total Non Farm Employment (000s), OSPB & EBR
Aggregate Retail Sales,($000s), ADOR
Total New Residential Permits (units), Census C-40
Total Number Housing Units Sold, ARMLS
Average Unit Price ($), ARMLS

Phoenix-Mesa-Glendale MSA - Quarterly
Population (000s, seas adj), ADHS & EBR
Natural Increase
Net Migration
Total Personal Income ($mil, SAAR) BEA & EBR
Per Capita Personal Income ($, SAAR) EBR

Tucson MSA - Monthly
Civilian Labor Force (000s), OSPB
Unemployment Rate, Seas. Adj. (%)
Total Non Farm Employment (000s), OSPB & EBR
Aggregate Retail Sales,($000s), ADOR

Dec 10

Jan 11

Feb 11

Mar 11

Apr 11

2,125.6

2,126.6

2,127.4

2,134.4

2,131.8

8.5

9.3

8.8

8.7

8.1

1,713.9

1,682.1

1,698.4

1,704.3

1,714.8

5,136,402

4,099,591

4,340,741

4,924,116

...

463

434

508

887

750

7,409

5,736

6,298

8,674

9,328

167,085

163,941

162,583

165,465

161,228

10 I

10 II

10 III

10 IV

11 I

4,205.8

4,197.1

4,188.2

4,188.2

...

9.2

8.9

8.5

8.2

...

-17.6

-17.6

-17.4

-8.2

...

152,224

152,973

153,722

154,471

...

36,194

36,447

36,703

36,882

...

Dec 10

Jan 11

Feb 11

Mar 11

Apr 11

488.9

487.3

488.1

491.8

491.4

8.4

9.2

8.7

8.5

7.9

356.3

349.2

353.3

355.2

359.4

1,115,830

865,678

937,707

1,039,571

...

Total New Residential Permits (units), Census C-40

172

114

425

195

124

Total Number Housing Units Sold, TAR

907

780

879

1,169

1,152

186,399

166,998

182,388

163,590

173,981

Tucson MSA - Quarterly

Average Unit Price ($), TAR

10 I

10 II

10 III

10 IV

11 I

Population (000s, seas adj), ADHS & EBR

984.2

981.6

978.9

978.9

...

1.2

1.1

1.0

1.0

...

Natural Increase

-3.8

-3.7

-3.7

-1.0

...

Total Personal Income ($mil, SAAR) BEA & EBR

Net Migrati on

34,865

35,004

35,143

35,283

...

Per Capita Personal Income ($, SAAR) EBR

35,425

35,662

35,901

36,043

...

Dec 10

Jan 11

Feb 11

Mar 11

Apr 11

22,825

23,050

22,750

22,725

22,300

Apache County
Civilian Labor Force, OSPB & EBR
Unemployment Rate (%)
Total Non Farm Employment (000s), OSPB & EBR

15.6

17.1

17

16.5

15.6

19,325

19,025

18,900

18,825

18,825

Total Private

7,250

7,125

7,100

7,075

7,150

Government

12,075

11,900

11,800

11,750

11,675

12,409

13,100

17,635

15,435

...

Gross Retail Sales ($000s), ADOR

>>Need More?
For historical data and many more detailed economic indicators for Arizona in simple easy to generate reports online,
subscribe to the EBR Database Online. To learn more visit: http://ebr.eller.arizona.edu/datacenter/EBR_Database.aspx.
The Economic and Business Research Center has maintained economic indicators on the State of Arizona since 1949.

www.eller.arizona.edu

19

ARIZONA’S ECONOMY

Arizona Economic Indicators
Flagstaff MSA (Coconino County)
Civilian Labor Force, ADOC & EBR
Unemployment Rate (%)
Total Non Farm Employment (000s), OSPB & EBR
Total Private
Government
Gross Retail Sales ($000s), ADOR
Total New Residential Permits (units), Census C-40

Lake Havasu City - Kingman MSA
(Mohave County)
Civilian Labor Force, ADOC & EBR
Unemployment Rate (%)

Jan 11

Feb 11

Mar 11

Apr 11

76,400

76,600

76,600

78,000

78,600

8.5

9.4

8.9

8.5

7.6

61,700

60,900

61,400

62,500

64,400

42,400

41,900

41,900

42,900

44,500

19,300

19,000

19,500

19,600

19,900

130,977

96,695

110,925

130,358

...

79

6

7

10

18

Dec 10

Jan 11

Feb 11

Mar 11

Apr 11

90,600

91,300

91,400

92,400

92,100

10.7

11.5

11.1

10.9

10.1

45,400

44,800

45,500

46,100

46,300

Total Private

37,400

36,800

37,200

37,900

37,900

Government

8,000

8,000

8,300

8,200

8,400

165,311

130,943

148,602

164,962

...

15

16

15

30

21

Dec 10

Jan 11

Feb 11

Mar 11

Apr 11

7,275

7,500

7,400

7,300

7,125

Total Non Farm Employment (000s), OSPB & EBR

Gross Retail Sales ($000s), ADOR
Total New Residential Permits (units), Census C-40

La Paz County
Civilian Labor Force, ADOC & EBR
Unemployment Rate (%)

10.3

11.3

10.8

10.6

10.2

4,325

4,525

4,500

4,350

4,325

Total Private

2,500

2,525

2,525

2,625

2,575

Government

1,825

2,000

1,975

1,725

1,750

21,335

29,553

26,183

26,493

...

Dec 10

Jan 11

Feb 11

Mar 11

Apr 11

22,900

22,975

23,100

23,650

23,850

16.0

15.0

15.0

16.6

17.2

Total Non Farm Employment (000s), OSPB & EBR

Gross Retail Sales ($000s), ADOR

Nogales Micropolitan SA
(Santa Cruz County)
Civilian Labor Force, ADOC & EBR
Unemployment Rate (%)
Total Non Farm Employment (000s), OSPB & EBR

19,500

19,875

20,150

19,675

19,675

Total Private

6,850

6,950

7,100

7,025

7,050

Government

12,650

12,925

13,050

12,650

12,625

11,502

13,263

-1,437

14,798

...

1,171

673

651

707

585

Dec 10

Jan 11

Feb 11

Mar 11

Apr 11

23,175

23,150

23,000

23,100

22,925

10.7

11.6

11.1

10.9

10.3

13,700

13,500

13,575

13,500

13,700

8,800

8,725

8,775

8,725

8,875

Gross Retail Sales ($000s), ADOR
Total New Residential Permits (units), Census C-40

Payson MSA (Gila County)
Civilian Labor Force, ADOC & EBR
Unemployment Rate (%)
Total Non Farm Employment (000s), OSPB & EBR
Total Private
Government
Gross Retail Sales ($000s), ADOR

20

Dec 10

4,900

4,775

4,800

4,775

4,825

34,214

27,151

30,270

32,943

...

Economic and Business Center, Eller College of Management, The University of Arizona

June, 2011 Summer Issue

Arizona Economic Indicators
Prescott Micropolitan SA
(Yavapai County)
Civilian Labor Force, ADOC & EBR
Unemployment Rate (%)
Total Non Farm Employment (000s), OSPB & EBR
Total Private
Government
Gross Retail Sales ($000s), ADOR
Total New Residential Permits (units), Census C-40

Safford MSA
(Graham & Greenlee Counties)
Civilian Labor Force, ADOC & EBR
Unemployment Rate (%)
Total Non Farm Employment (000s), OSPB & EBR
Total Private
Government
Gross Retail Sales ($000s), ADOR

Showlow Micropolitan SA
(Navajo County)
Civilian Labor Force, ADOC & EBR
Unemployment Rate (%)

Dec 10

Jan 11

Feb 11

Mar 11

Apr 11

96,800

96,900

96,900

98,600

98,100

10.0

11.0

10.4

10.1

9.5

54,200

53,400

54,000

54,500

55,200

43,400

42,700

42,800

43,400

43,900

10,800

10,700

11,200

11,100

11,300

167,187

127,096

138,779

159,070

...

20

17

20

30

18

Dec 10

Jan 11

Feb 11

Mar 11

Apr 11

19,175

18,800

19,175

19,325

19,100

11.1

12.0

11.1

10.6

10.2

11,600

11,175

11,700

11,700

11,775

8,050

7,950

8,100

8,150

8,200

3,550

3,225

3,600

3,550

3,575

37,012

34,270

37,852

42,737

…

Dec 10

Jan 11

Feb 11

Mar 11

Apr 11

41,325

41,300

41,100

41,175

40,325

15.4

16.7

16.0

15.7

14.9

26,800

26,225

26,500

26,400

26,300

Total Private

16,775

16,525

16,300

16,200

16,425

Government

10,025

9,700

10,200

10,200

9,875

108,386

74,030

73,444

80,976

...

Dec 10

Jan 11

Feb 11

Mar 11

Apr 11

64,275

64,550

64,150

64,850

63,650

8.2

9.2

8.9

8.5

8.2

37,200

36,875

36,900

37,175

36,950

24,325

24,025

24,000

24,275

24,050

Total Non Farm Employment (000s), OSPB & EBR

Gross Retail Sales ($000s), ADOR

Sierra Vista - Douglas Micropolitan SA
(Cochise County)
Civilian Labor Force, ADOC & EBR
Unemployment Rate (%)
Total Non Farm Employment (000s), OSPB & EBR
Total Private

12,875

12,850

12,900

12,900

12,900

Gross Retail Sales ($000s), ADOR

Government

103,584

76,338

84,549

95,472

...

Yuma MSA (Yuma County)

Dec 10

Jan 11

Feb 11

Mar 11

Apr 11

90,700

88,800

88,100

89,500

91,700

Civilian Labor Force, ADOC & EBR
Unemployment Rate (%)
Total Non Farm Employment (000s), OSPB & EBR

22.9

23.1

21.3

21.8

25.3

50,300

49,200

50,100

50,200

49,700

Total Private

35,000

34,700

34,800

34,900

34,500

Government

15,300

14,500

15,300

15,300

15,200

185,779

144,172

167,266

174,929

...

11

18

38

37

33

Gross Retail Sales ($000s), ADOR
Total New Residential Permits (units), Census C-40

www.eller.arizona.edu

21

June, 2011 Summer Issue

ARIZONA’S ECONOMY
ECONOMIC AND BUSINESS RESEARCH CENTER

McClelland Hall, Room 103
P.O. Box 210108
1130 E. Helen Street
Tucson, AZ, 85721-0108
Phone: 520-621-2155
Fax: 520-621-2150
E-mail:
ebrpublications@eller.arizona.edu
Marshall J. Vest
Director
(520) 621-4075
mvest@eller.arizona.edu
Alberta Charney, Ph.D.
Senior Research Economist
(520) 621-2291
acharney@eller.arizona.edu
Pia Montoya
Database Specialist
(520) 621-2523
pmontoya@eller.arizona.edu
Lora Mwaniki-Lyman
Research Economist
(520) 626-6439
loramwa@eller.arizona.edu
Maile L. Nadelhoffer
Senior Research
Economist & Webmaster
(520) 621-4050
mln@eller.arizona.edu
Vera Pavlakovich-Kochi, Ph.D.
Senior Regional Scientist
(520) 626-0520
vkp@eller.arizona.edu
Valorie Rice
Librarian & State Data Center
(520) 621-2109
vrice@eller.arizona.edu

To subscribe to Arizona’s Economy or other Economic and Business Research Publications, visit:
ebr.eller.arizona.edu/subscribe/
Arizona’s Economy, published quarterly by the Economic and Business Research
Center at the Eller College of Management, is provided as an educational service by
The University of Arizona. Correspondence should be addressed to EBR Publications,
McClelland Hall Room 103, PO Box 210108, Tucson, Arizona 85721-0108.
Arizona’s Economy is available online at: azeconomy.eller.arizona.edu
As part of The University of Arizona’s public mission to improve quality of life for the
people of Arizona and the nation, the Economic and Business Research Center is dedicated
to providing Arizona citizens and decision makers with high quality economic
data and objective forecasts and analyses.
Copyright 2011 by The University of Arizona. Information contained in this publication
may be copied or reprinted with credit to the Eller College of Management at
The University of Arizona.

>> Visit us online at ebr.eller.arizona.edu!

Thank you to our community sponsors for their ongoing support
of Economic and Business Research Center programs.
Arizona Electric Power Cooperative

Elliott D. Pollack and Company

Arizona Joint Legislative Budget Committee

Maricopa Association of Governments

Arizona Public Service Company

Maricopa County		

BBVA Compass

Pima Association of Governments

CB Richard Ellis

Pima County

JPMorgan Chase & Co.

Pinal County		

City of Phoenix

Salt River Project

City of Tempe		

Tucson Electric Power Company

Cox Communications
Special thanks to
for its ongoing support of
the Economic and Business Research Center website!
http://ebr.eller.arizona.edu/