Homeowners in Pinal County looking for signs of what is to come in the housing market can rest easy, according to a leading expert on the regional economy.
Noted Valley economist Elliott D. Pollack, in his 14th annual forecast on the greater Phoenix market, said all indications point to a continuation of the booming real estate market. He spoke Friday to members of Pinal Partnership, making his first virtual presentation.
“The economy will normalize in the second quarter of 2021 due to having COVID-19 vaccines in wide distribution,” he said. “There is significant pent-up demand in the real estate market, and people are sitting on gobs of cash because they’ve had nowhere to spend it for the past nine months, so we will see explosive growth at first, then continue to grow at above normal trend lines through 2023.”
Other factors Pollack mentioned as indicators of a continued strong market (at least for sellers) included extremely low inventory, high demand and record-low interest rates. This combination of factors indicates “there is no chance of a significant downturn in the housing market in 2021 or ’22,” he said.
He suggested many of the COVID-related changes that businesses have been forced to make to continue operating will likely become permanent.
“We’ll see a change to e-commerce accelerated as people are now used to shopping online,” he said. “Restaurants will continue curbside and delivery models they have instituted, telemedicine appointments with doctors will continue due to efficiencies, the share of online education will rise from pre-COVID levels and 15-25 percent of all work will be remote, especially among white collar jobs. This will lead to a reduced need for office space over the next several years due to the growth in remote work.”
About 90 percent of all job growth in Arizona is in Maricopa and Pinal counties, which make up the demographic metro Phoenix market, he added. Metro Phoenix was the number one performing market in the country in 2020 and has been one of the top four markets in each of the last four years.
He said the housing market will reflect that growth, as the metro Phoenix had 4,985 new home starts in 2019, up from 4,188 in 2018, an increase of nearly 20 percent. He expects a similar level of growth when the final 2020 numbers are released.
There was even better news for Maricopa residents. “I expect the recovery to be even stronger in Pinal County than it will be in Maricopa County,” Pollack said.
Much of the region’s economic growth, he said, is tied to the influx of new residents to Arizona. He said 9.5 percent of all the people who move in the United States end up in Arizona, a rate that is four times the next highest ranked market.