Last month was the best March for new home sales in the Phoenix area since the boom of 2005, so it will take a while for that momentum to cool.
But homebuilding in metro Phoenix is bound to slow along with the rest of the economy due to the COVID-19 pandemic.
Fewer potential buyers are venturing out to check out new communities, even though some homebuilders still have sales offices open with hand sanitizer by the front door.
And workers still are building homes in many Valley subdivisions. Construction is one of the essential businesses named by Gov. Doug Ducey to remain open during this crisis.
Jim Belfiore, a homebuilding expert, is forecasting that this year's biggest drop in new home sales will come during the second quarter.
But don’t expect a repeat of the housing crash of 2008-12 when tens of thousands of new metro Phoenix homes sat empty as buyers walked away. Those neighborhoods became ghost towns for a few years until prices fell and enticed bargain buyers.
Back then, the housing market led the economy into a recession. That’s not the case this time.
“Conditions are rapidly changing in the housing market, going from a huge wave of demand to very little…” Belfiore said. “But it should be a temporary disruption.”
He held a video forecast last week to help builders and homebuyers with the latest data and tips during these tough uncertain times.
Belfiore expects fewer new homes to go up in the Valley than in recent years, which was a downward shift from earlier projections.
He revised his forecast from 27,400 new homes to go up this year down to 16,500. In 2019, 25,000 new Valley homes were built, compared to 23,500 in 2018.
Here are seven other insights from Belfiore:
Belfiore said July will be the biggest month for new home cancelations in the area.
If you have a new home under construction, or you're looking to buy a new home, consider these five tips:
“The world is not ending for the housing market, Belfiore said “There won’t be a freefall in new home prices because there’s little supply built and available now.
The sooner there’s a solution to the COVID crisis, the sooner people will feel more confident about moving and buying again,” he said.
Reach the reporter at [email protected] or 602-444-8040. Follow her on Twitter @Catherinereagor.
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