Are you ready for some football? Ask any of the 6.7 million Arizona residents and you’ll likely get an affirmative answer and a fist pump! But that wasn’t always the case for the Arizona Cardinals. Before building their state-of-the-art stadium in Glendale, Big Red wasn’t greeted with such fanfare; in fact, the stadium construction was met with much controversy. However, now with their NFC Championship, Super Bowl XLIII appearance, and multiple winning seasons, not only are the Cardinals are back in the good graces of NFL fans, but the University of Phoenix Stadium seems to provide a huge payoff to the Glendale area, especially Glendale real estate.
Glendale Real Estate and Economic Benefits of the Cardinals Stadium
You can’t miss the University of Phoenix Stadium – home of the Arizona Cardinals – on a clear day in Arizona. The impressive cactus-barrel shaped building, seating nearly 72,200 at its largest capacity, towers above anything in the vicinity. The impressive structure cost $455 million to build, most of which was provided by the Arizona taxpayers to the tune of $300.4 million. That may sound like a lot, but the economic benefits to the surrounding economy seem to make the expense a smart move.
Each year Cardinals’ games contribute approximately $150 million to the Arizona economy. That doesn’t include the $140 million yearly impact of hosting the Tostitos Fiesta Bowl, the $188 million influx from the 2011 BCS National Championship Game, or the $720 million from Super Bowl XLIX. And let’s not forget the revolving door of shows, concerts, expositions, trade shows and motorsport events hosted at University of Phoenix Stadium.
During the construction phase of the stadium, 3,500 jobs and $400 million were driven into the economy. Game days employee over 2,500 people on site, ranging from event, team, facility, catering and concessions, security, and housekeeping operations and services. With that said, it’s not an unfair assumption to say that the AZ Cards are pumping quite of bit of economically prosperous blood through the state of Arizona, but has any of this helped Glendale real estate?
Are the AZ Cardinals Helping Glendale Real Estate?
First, let’s look at the real estate market in Glendale, AZ before, during and after the market crash.
In the lead-up to the crash, Phoenix’s economy was booming, more so than many markets around the country. The Arizona housing market was on a steady uptick for more than a decade and a half before the great recession of 2008. Businesses, builders and new residents alike were flocking to the region in large droves, pushing land and home prices higher and higher. Household incomes were rising steadily as jobs were being added at a fast pace. The combination of rising asset prices and easily-accessed credit led Arizonans to borrow heavily. The average household debt surged far above the national average.
Then in 2008 with the collapse of the Lehman Brothers and the subprime mortgage crisis, the Arizona housing market along with that of the rest of the country plummeted into an abyss of foreclosures. Home prices fell as unemployment rose, reaching historic lows and high, respectively, in 2011-20012.
Since that time, many states have seen an economic resurgence and Arizona is no exception. Home resales were up 10 percent in 2010, according to ARMLS’s new STAT report. Home prices climbed 9 percent, new home construction hit 46 percent, and foreclosures were down 26 percent to the lowest level since 2006.
What the NFL Spotlight has done for the Arizona Market
Some may observe that the Arizona economy and Glendale real estate tanked after the completion of the Cardinals Stadium which was completed in 2006. Controversy arose as to the financial benefits of the NFL arena to the surrounding community. Studies show that while the first few years may have slowed the impact, the net result of the stadium has had a positive effect on Glendale real estate and the real estate in the surrounding cities since 2012.
The Elsevier Science Journal published a study by Xia Feng and Brad Humphreys analyzing the repercussions of professional sports stadiums in major U.S. cities concludes that “sports facilities generate positive spillover effects on the local economy, and that these spillover effects are capitalized into the value of owner-occupied residential housing”. In ordinary jargon, the construction of a sports arena yields higher home values in the cities closest to the building.
What’s more, the study also showed that age of the sporting venue plays a role in home values. “The positive and statistically significant sign on the stadium age variable supports the idea of positive spillovers, as this parameter suggests the longer a sports facility has been at a given location, greater the increase in median housing values near the facility”. In other words, the older the venue, the more valuable the surrounding real estate.
This is great news for Glendale real estate. The Cardinal Stadium is only ten years old and with that, we have seen home prices increase steadily. Current Glendale homes have risen 10.3 percent in the last year with an estimated 3 percent increase projected for 2017. Considering the positive impact of Feng and Humphreys study shows, we can conclude that housing prices will continue to rise in the Glendale area making this a great place to buy or rent a home.