Some optimism for Arizona’s economy, real estate sector after COVID-19

homebuilders
homebuilders

By Mike Sunnucks | Rose Law Group Reporter

Nate Nathan has been through 5 economic and real estate downturns during his career. The fallout from the COVID-19 pandemic will be Nathan’s sixth.

But Nathan, the President and Designated Broker for land brokerage firm Nathan and Associates, said there is some economic hope at the end of the Coronavirus tunnel.

“When we recover it will be crazy,” said Nathan during Rose Law Group’s New Virtual Power Lunch on Friday.

He points out that before pandemic brought much of the economy to a halt that home sales were robust and other economic indicators were strong. Nathan said 90 percent of his pending land and real estate deals are looking extending escrow for 60 to 120 days.

That shows confidence in the marketplace and Nathan expects to see more households and businesses to look at moving to markets such as Arizona after pandemic eases. “Arizona is going to go ballistic,” Nathan said.

New homes sales, for example, were the strongest since 2005 during the first part of March, according to Belfiore Real Estate Consulting.

That gives home builder and real estate dealmakers that the state’s economy may bounce back quicker whenever a sense of normalcy returns.

“Sales two weeks ago were off the charts,” said Michael “Frenchy” IlesCremieux, Division President for Richmond American Homes during the Rose Law Group forum.

I think it’s going to come back very fiercely,” IlesCremieux said.

Dr. Leigh Erin Connealy said she expects the COVID-19 to continue to require business closures and social distancing through May.

That was positive news for Nathan citing that fits with his deals and their escrow extensions.

Regional real estate housing expert Jim Belfiore has said he expects the residential real estate market to return to normal by the fourth quarter with a robust 2021.

Still, the pandemic is having its adverse impacts on tourism, small businesses and the hospitality industry. The Economic Policy Institute estimate Arizona could lose close to 396,000 jobs and see its unemployment rate go to 15.6 percent by July because of the impact of the virus.

IlesCremieux said a key is for employers and key regional economic players to realize the COVID-19 slowdown is different than past real estate and economic bubbles. He said this situation takes different approaches than other cycles. “Your muscle memory goes back to the recession,” he said. “Richmond American is still optimistic. We haven’t lost hope.”

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