by Sandy Griffis, Executive Director, Yavapai County Contractors Association
One thing COVID-19 has taught us is … there is no playbook. We are in an unpredictable, shifting, liquefied way of life. The COVID-19 economy certainly has presented us with winners and losers with the housing/construction industry a clear winner.
The housing market stumbled early on when COVID-19 came into our lives, and we all attempted to understand what was happening. We saw consumer spending, a critical component of the economy, virtually disappear and evaporate in the blink of an eye. There was talk the housing industry could be hit as hard as it was during our last major recession.
Guess what? The housing market increased dramatically. As a result of COVID-19 shutdowns that closed offices, businesses, schools and more, self-isolation forced Americans to take a much closer look at their homes.
The quarantined and enforced stay at home orders had families discovering unfavorable blemishes in living situations. Kitchens were discovered to be too small, yards were too small and not conducive for play times, there were not enough electrical outlets and work station spaces. And, what about the lack of privacy when the entire family is home 24/7?
Video chats were also the cause of remodeling — with the cameras on, homeowners wanted the background to look nice.
Where families lived and how they lived was changed by COVID-19. As the home became a school classroom, gym, day care and restaurant, it suddenly was transformed into the focal point of life. As more homebuyers were stuck at home, more realized they needed space to fit their needs.
In Yavapai County, many families moved forward with new builds and/or projects at more than twice the rate of those cutting back or canceling planned projects. Yes, our local industry did experience homeowners cutting back or canceling their 2020 projects. The initial fear of COVID-19 created a reprioritization of discretionary spending. However those initial canceled or delayed projects are back on the schedule.
COVID-19 created a pent-up demand for home renovations and new larger homes, and the market has not decelerated. First-time buyers are now entering the market because of COVID-19. The apartments were not working for families. Low mortgage rates were an incentive; proof of the positive purchasing power of the lowest mortgage rates on record.
One of the downfalls with COVID-19 is the lack of labor force and how hard it was hit. COVID-19 has shot an arrow directly at profitability. It is said that millions of Americans will continue to be out of work for the foreseeable future, and it will take years until the labor market is fully recovered.
We do not have a crystal ball. With the high unemployment rate, is there going to be a potential foreclosure crisis? Are we going to have a second round of lockdowns? Will there be a lack of housing inventory? Will there be a pullback in government stimulus?
Will remodeling and new home construction continue, I say yes. COVID-19 certainly has brought on many many questions. Let’s hope for the best.