Most agree Donald Trump’s plan to deport 11 million immigrants living illegally in the U.S. would have a big impact on metro Phoenix’s housing market.
The dispute is over whether it would hurt or help the market.
Many housing experts think the mass deportation would hurt home prices and rents. But at least one prominent Arizona politician and Trump supporter thinks it would lead to more affordable housing for new workers coming to the Valley.
About 190,000 metro Phoenix residents aren’t in the U.S. legally, according to national research. That many people translates to about 100,000 Valley households.
Basic math: A drop in the number of people living in the Valley means fewer homeowners and renters.
Basic supply and demand: An increase in empty homes because of foreclosures usually leads to a drop in overall values. Higher rental vacancies means lower rents.
I asked a few housing analysts to project what the impact of Trump’s deportation plan would be on Phoenix’s housing market. All said it would be a hit to a market finally about to fully recover from the last crash.
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None of the housing experts wanted to go on the record because the issue is so politically divisive. I understand their position. So please send angry emails to me at [email protected].
One analyst looked at Pew Research Center data on the number of people living in the Phoenix area illegally and said a mass deportation handled in a short time frame would lead to 1 in every 9 Valley homes becoming empty.
And the biggest impact would be on rentals and homes priced below $500,000.
On the other hand, state Sen. John Kavanagh, R-Fountain Hills, sees the Trump deportation plan as a benefit to metro Phoenix.
“It’s a solution to getting more affordable housing,” he told me. “The argument suggests that if people here illegally left, no one would take their place. I don’t think that’s true.”
Kavanagh believes the jobs and homes left vacant by Trump’s deportation plan would be filled by “millions of people who are waiting to come here legally.”
Many real-estate agents disagree.
Hispanics are now the fastest-growing group of homebuyers in metro Phoenix. Most are in the U.S. legally but could still be deterred by another illegal-immigration law like Arizona’s SB 1070, agents say.
Glendale HomeSmart real-estate agent Martha Navarro told me some Hispanics are still leery about buying in Arizona because of bad feelings from SB 1070.
Nate Martinez, owner of Glendale’s Re/Max Professionals, called Hispanics a huge economic engine for Arizona.
“And if you don’t believe it, just look at how the economy was hurt when so many left Arizona because of SB 1070," he said.
SB 1070’s impact on metro Phoenix’s housing market is difficult to separate from the housing crash brought on by Wall Street speculation in subprime mortgages, since they happened about the same time. But at least 100,000 Valley homes and apartments were left empty between 2007 and 2010 because of Hispanics leaving.
That many homes and apartments emptying out quickly in the Valley again would lead to investors selling, home-building slowing and a “negative equity becoming a serious problem” for recent homebuyers once again, according to the housing analyst.
What’s that saying about learning from history so it doesn’t repeat itself?