By Mike Sunnucks | Rose Law Group Reporter
Veteran economist Elliott Pollack is impressed new home sales have only dropped 45 percent regionally since COVID-19 shutdown much of the economy.
“Housing permits were supposed to be down 80 percent. They were only down 45 percent last month. That’s amazing considering nobody can get out of their house to buy a house,” said Pollack during today’s Rose Law Group New Economy (Virtual) Power Lunch. “It bodes well for the housing market.”
Still, Pollack said the economy faces plenty of COVID-19 challenges including consumer confidence and how long it takes to recoup the historic job losses caused by the pandemic.
The U.S. economy has lost more than 33 million jobs because of the pandemic. Some small businesses, retailers, restaurants, and media companies are closing permanently. Unemployment rates could hit 20 percent.
Pollack said it could take years to recoup those job losses and the overall upheaval. “I think this a 2 to 5-year deal,” said Pollack who is CEO of Elliott D. Pollack & Company in Scottsdale.
Pollack said development of vaccine or some other treatment for COVID-19 is the prime way to move toward a return to normalcy.
“If you want this to end tomorrow and things to return to normal come up with a vaccine,” Pollack told the virtual event hosted by Rose Law Group Founder and President Jordan Rose and Partner Court Rich.
John Carlson, president of Mark-Taylor Residential, said the jobs rebound and growth will impact the greater economy as well as the real estate sector including apartments and the housing markets.
“It’s really about job growth for us,” said Carlson.
Scottsdale-based Mark-Taylor is a leading multifamily developer.
He said the employment and economic recovery could take until “at least 2021 and into 2022”.
“That’s a concern as we move forward in terms of how it affects the demand in our market,” Carlson said of COVID-19’s impact on jobs.
Apartment evictions are on hold during the pandemic. Carlson said expects to an increase in those in August and September when mandated eviction holds are lifted. He is also seeing some apartment tenants put a hold on potential home purchases. “A lot of them are hitting pause on notices to vacate,” Carlson said.
Pollack is optimistic that Arizona will do well compared to other states and regions coming out of COVID. Arizona’s warm climate, lack of population density compared to New York and California and its more business friendly climate could all help attract jobs and job seekers.
Pollack said the Federal Reserve’s moves should help businesses with liquidity and finances.
“This is unprecedented,” he said.
It will come down to how and when consumers hit hard by job losses and uncertainty will find their footing. “The problem is not money it is consumer confidence,” Pollack said.