By Mike Sunnucks | Rose Law Group Reporter
The regional housing market has come back strong as Arizona navigates COVID-19 and is projected to end 2020 with a gain in permits for new home construction. That is according to real estate expert Jim Belfiore. “The environment is very, very good,” said Belfiore, who is president of Belfiore Real Estate Consulting in Phoenix.
He outlined the state of the Arizona real estate market during a virtual forum Wednesday. Belfiore projects there will be 27,400 new home construction permits this year. That would be up 6 percent from 2019 when there were 24,937 permits taken out by builders.
Belfiore projects metro Phoenix could end up with the 4th most new home construction permits in the U.S. for the year.
Home sales in the Phoenix metro area will post 7 percent in July drop compared to a year ago. But Belfiore expects to see strong sales growth in August and for a positive year for new home construction.
All this is happening as Arizona navigates COVID-19.He pointed to historically low mortgage interest rates and continued and expected population growth in Arizona to drive home sales even as the state and country continue to navigate the COVID-19 pandemic.
“We have growth. We have people moving here,” Belfiore said.
Belfiore said COVID-19’s impact on housing market was not as bad as first feared when the pandemic shutdown much of the Arizona economy from mid-March to mid-May. Sales only dropped 28 percent year-over-year. That is significantly less than first feared.
“Now we are surging. It is absolutely crazy. It is blowing up,” Belfiore said of the strength of new home sales.
A drop in the number of existing / resale homes for sales has also helped drive buyers to new home communities. There are 13,451 existing home listing in metro Phoenix down 28 percent from a year ago, according to Belfiore.
Belfiore said the housing market and economy still need to traverse all the challenges created by COVID-19. He pointed out there are 63,700 fewer jobs in metro Phoenix and metro Tucson has 10,600 fewer jobs than a year ago, according to June employment numbers.
Steven Hensley, an analyst for Belfiore’s firm, said the Tucson market will end 2020 with 3,280 new home construction permits. That would be up 3.1 percent from 2019 when there were 3,183 permits.
Still, historically low mortgage interest rates and Arizona home buyers’ willingness to continue with purchase even as COVID discourages those in other market keep driving demand, Belfiore contends.
“We’re still going to see high levels of demand going forward,” Belfiore said.