Next Exit: Extended Housing Slump.

Foreclosures, short sales, deed in lieu…  How many homes in your neighborhood are vacant?  How many have “For Sale” signs in the yard?  How many are bank owned?  Have you tried to refinance or sell your home and were shocked by the offers or appraisals?

As of mid-February it is estimated that Arizona has a 10+-month inventory of housing units on the market.  Thousands and thousands of homes throughout the valley sitting empty, waiting for their next caretaker.  Every area from Scottsdale to Ahwatukee, Buckeye to Queen Creek, Paradise Valley to Surprise is affected. 

Through all of the boom and bust cycles, population growth has been the savior for Arizona.  People want to come here, to live, to work, to raise their kids, and to retire.  Net in-migration requires housing units and in each cycle new neighbors from other states and countries have come here, in the process absorbing housing inventory and tilting the supply and demand equation toward demand.  Our current down cycle requires increasing demand, thus population growth, to absorb excess housing supply.

The road to stabilizing the Arizona economy and housing market runs right through our classrooms. 

One of the most important considerations in buying a home and selecting a community are its schools.  Those with small children are understandably concerned about the quality of schools.  Prospective residents including those without children are concerned with the strength of the local market in maintaining and enhancing the value of homes.  It is supply and demand in action, pure and simple.  If our schools earn a good reputation for academics, if the facilities are well maintained and a source of community pride, demand for homes goes up.  That is how excess inventory is absorbed.  That is one key way to get our housing market back on its feet. 

We face massive state budget deficits in Arizona.  Many residents, myself included, have argued against cuts to education because of what it will do to our kids and our schools.  Stop for a moment and consider what deep cuts will do to the prognosis of our housing market and our state economy.  What will prospective residents think when they learn that we are increasing class sizes, firing teachers and closing schools?  If we want our current residents to stay, if we want prospective residents to join us, we need the basic foundation that a strong educational system provides.  We need to find adequate funding for schools.

A long-standing fallacy is that Arizona is a state full of retirees.  One big Sun City, is the implied message of this fable.  A look at census demographics paints a very different picture of our state.  Arizona is the fifth youngest state in the country according to the U.S. Census Bureau.  We owe these young citizens a competitive and challenging education.  We owe the rest of our residents our best effort at restoring the state economy and housing market.  All roads lead through the Arizona classroom.

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The author, David Schaefer is an ASCPA member in industry.  He is also a serving his community as a Governing Board Member for Cave Creek Unified School District #93, serving the areas of Cave Creek, Carefree, Rio Verde, North Scottsdale and Northeast Phoenix.