By Mike Sunnucks | Rose Law Group Reporter
Real estate expert Jim Belfiore expects to see significant drops in new and existing homes sales in the second and third quarters due to the Coronavirus (COVID-19).
But Belfiore also expects the real estate impact to be temporary.
“Demand is going to drop but we do thing it’s a short-term
phenomenon,” said Belfiore, who is president of Belfiore Real Estate Consulting in Phoenix.
He projects that the sales drop will flatten out in the the fourth quarter and demand to improve in the first quarter of next year.
“We expect flattening in the fourth quarter and surging demand in the first quarter of next year,” said Belfiore.
Belfiore projects an 80 percent drop in regional homes sales in the second quarter compared to the same quarter last year and a 50 percent drop in third quarter sales versus last year as the Coronavirus temporarily shutters much of the economy.
Belfiore is now expecting 16,500 new home permits to be issued this year down from his previous projection of 28,400 permits this year.
The Phoenix region saw 24,937 new home permits last year.
Belfiore expects to see 30,000 new home construction permits in 2021 and 32,000 in 2022 and 2023. Those projects are up from previous projections of 30,000 new home permits between 2021 and 2024.
“There will be pent up demand for sure,” Belfiore said of his expectations.
Belfiore said housing supplies are already low so that will help the market from seeing price declines. He also does not expect to see new listings of resale homes in the short term as buyers and sellers hunker down during the virus.
“Supply is not going to increase dramatically,” Belfiore said adding that will help the regional market regain its footing after the pandemic and its economic impact subsides.
The numbers for home builders were impressive to start 2020 and before COVID-19’s impact. Historically low mortgage interest rates fueled those sales.
Builders sold 20 percent more homes from mid-February to mid-March than sold the previous 30 days and they sold 42 percent more new homes than they did the same 30-day period in 2019.