By Mike Sunnucks | Rose Law Group Reporter
The COVID-19 pandemic has brought much of the real estate and home building industries to a temporary stop.
The economic impacts are also changing dynamics for land, labor and materials, according to Jim Belfiore, president of Belfiore Real Estate Consulting.
The Phoenix-based research firm tracks new home sales and other market data and Belfiore is a top regional real estate expert.
He expects land sales — like other aspects of the economy and real estate industry — to temporarily slow as builders and investors work through when the pandemic will ease up and the economy and housing demand will return.
“There is going to be a lot less competition to buy,” Belfiore said.
Belfiore said that could offer opportunities for builders with less potential bidders for land in the marketplace. Land and labor prices had been increasing in metro Phoenix before the Coronavirus’ arrival and impact.
Belfiore said builders and contractors could see some easing of high labor costs with the impacts of the pandemic including some projects being put on hold and the surge of newly unemployed, laid off and furloughed workers. “I would expect labor costs to ease up a little bit,” said Belfiore.
A shortage of construction labor and truck drivers has been a major challenge for home builders and contractors. That dynamic could change with record new unemployment insurance claims and an expected 20 million jobs temporarily lost nationally because of COVID-19.
Belfiore is projecting 16,500 new home construction permits in the Phoenix region this year. His research firm previously expected to see 27,400 new home permits in the region (Maricopa and Pinal counties.) That is a 40 percent drop. The region saw 24,937 new home permits for construction last year, according to Belfiore.
Belfiore said he does see builders and developers moving projects through the government entitlement process.
“I think there is a recognition that this is not going to last forever. Projects are still be entitled,” Belfiore said.