Lessons learned, market resiliency as housing market keeps tabs on COVID

By Mike Sunnucks | Rose Law Group Reporter

Home builders and the real estate industry are hoping the summer looks like May and not April as they watch the rise in COVID-19 cases in Arizona and some other states.

May saw a big rebound in home sales with much of the economy reopening in Arizona. That contrasts to April when COVID shutdowns slowed down home sales significantly.

Steven Hensley, an analyst with Belfiore Real Estate Consulting in Phoenix, said the slow down in home sales has been less than first expected and that home builders have learned some best practices that can serve them going forward.

“They’ve all learned from what they saw before and what works and what doesn’t work,” Hensley said.

Some home builders kept sales offices and model homes open for private showings with social distancing during the previous COVID shutdown. Others are using smart technology for virtual towers as well as to set up and give prospective buyers access to model homes without coming into contact with sales agents and others.

Major home builders such as Meritage Homes, Taylor-Morrison Homes and Toll Brothers have all ramped up their technology efforts and have seen rises in virtual sales.

Hensley said COVID-19’s impact on Arizona’s housing market has not been as severe as expect and has been helped by historically low interest rates. Early projections had home sales dropping as much as 80 percent because of COVID-19.

Hensley said current projections are for the Tucson market to be down 25 percent in the second quarter compared to last year, 15 percent in the third quarter and 10 percent in the fourth quarter.

In the Phoenix market, Belfiore’s latest research analysis projects home sales to be down 15 percent to 20 percent lower over the next 60 days compared to a year ago and 5 percent to 13 percent lower from September to December compared to same time last year.

“The market is proving to be pretty resilient right now,” Hensley said.

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