Arizona Existing Home Sales Up 14.5 Percent- BMO Economics

- Employment Lost Momentum in Late 2011

- Population Growth Stalled

- Existing Home Supply Being worked Off

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Feb 14, 2012, 11:00 ET

PHOENIX, Feb. 14, 2012 /PRNewswire/ -- The Arizona economy continues to grapple with a depressed housing market and beleaguered construction sector. Although home prices are still falling firmer sales have worked off much of the existing home supply. Real GDP growth was likely a modest 1.5 percent in 2011, and should continue to underperform until housing can find firmer footing, according to the State Monitor report released today by BMO Capital Markets Economics.

The Arizona labor market cooled in late 2011, but nonfarm payrolls were up a solid 1.6 percent year over year in December, outpacing the 1.3 percent year over national average. After seeing growth through much of 2011, manufacturing and construction employment both fell in November and December. Construction employment is running at less than half of peak levels seen in 2006. The jobless rate continues to decline, but remains elevated at 8.7 percent in December.

"Our sector experience, local knowledge and mid-market focus are all designed to help drive our clients' growth," said Steve Johnson, President, Arizona Region of M&I, a part of BMO Financial Group. "We are invested in their success, and we are continuing to help them navigate this uncertain economy."

Population growth remains weak, checking in at just 1.1 percent in 2011. That's down from peak growth of 3.3 percent in 2005 and 2006 at the height of the housing boom.

Existing home sales are up 14.5 percent year over year through 2011 Q3. The pickup in sales has helped work off the inventory of unsold existing homes, with months' supply in Phoenix-Mesa-Scottsdale dropping to just 2.9 in Q3, below the long-run norm of about 5.5 months.

"Impressively, existing sales have recovered about 65 percent of the peak-to-trough decline seen during the recession," according to Sherry Cooper, Chief Economist, BMO Financial Group.

The full State Monitor report can be downloaded at bmocm.com/economics.

About BMO Financial Group
Based in Chicago, BMO Harris Bank N.A. provides a broad range of personal banking products and solutions through approximately 700 branches and approximately 1,350 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. Equal Housing Lender. NMLS#401052. BMO Harris Bank(SM) and M&I® are trade names 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.