Sales a little lackluster recently? Real estate selling may be a little tougher in upcoming months, courtesy of new home construction, which has jumped substantially. Adding to this complex quandary: Buyer ignorance of the new home buying process.
How many new homes are we talking?
According to the U.S. Department of Commerce’s monthly new residential construction report, the number of brand-new homes completed and ready for real estate selling in August jumped 4.9% from just one month prior, up 6.7% from one year ago. The new homes, finally seeing a jump in the entry-level market versus the industry’s past preference for luxury builds, are hoped to alleviate the current housing crunch – although they are still expected to fall short of what’s needed.
Is the end nigh?
Nope. Builders are convinced of demand, prompting an increase in permits, rebounding from July and up 12.5% from July to August – 8.7% year-over-year. Permits and construction of new condos and apartments are also rising.
New homes, where are they?
Primarily in the South (51,000 builder permits in August), where companies and people are migrating to enjoy a lower cost of living. The West also saw a 14.5% rise in permits from the previous month, at 25,300. The North saw a large rise percentage-wise, up 16.7% at 9,800, but land is scarce and expensive, holding builders back.
Homebuyers, where are they?
Many are sticking their heads in the sand, shopping new models and hoping for reduced prices in the amount of agent commissions, not understanding these costs are commonly built into the price of homes. Others are ignorant, viewing homes solo, losing their opportunity for realtor representation, and leaving builders to pocket the money.
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