Looking for New Construction? Here’s What to Keep in Mind COMPLIMENTS OF MATT WIELGOSAmong the many unexpected effects of the COVID-19 pandemic has been an unprecedented level of demand
New Homes Dominate Real Estate Market
Dated: June 6 2018
If you are a homebuyer looking for a brand-spanking new house, you’re in luck. The market is trending toward new construction with the most brand-new, single-family houses to hit the market since the Great Recession, according to Realtor.com.
The number of these newly-built homes, 795,000, jumped 7.7% from 2016 to 2017, according to the U.S. Census Bureau report on the 2017 Characteristics of New Housing. Median square foot size was up a bit as well, to 2,426 from 2,422 the year before.
Chief NAR economist Danielle Hale says, “It’s good that there’s more construction, but there’s still plenty of room for more building,” who adds that builders seem to be catering almost exclusively to upper-end or move-up buyers. She stresses that there is still plenty of room for affordable homes to be built.
This recent crop of new, larger homes tend to be more expensive than older, existing residences. For example, the median price of a new home was $312,400 in April—compared with $257,900 for an existing home. That's 21.1% more, no doubt due to high land, construction labor, and materials costs.
The overwhelming majority of these brand new homes have three or four bedrooms and 2.5 or 3 baths, and 2-car garages. About a quarter of them have full or partial basements (most notably in states where basements are expected in new homes).
It seems homebuilders are not leaving future maintenance of these (mostly suburban) new home neighborhoods up in the air; in many cases, they are putting homeowners’ associations in place from the start. About 487,000 of these new homes were to be governed by HOAs, adding fees on top of mortgage payments, boxing out many first-time homebuyers in the process.
Because of land costs, ”Construction is slowly shifting back from the core of metro areas to the outer suburbs. It’s because that's where your normal buyers look for houses," says Issi Romem, chief economist at BuildZoom, an online homebuilding and remodelling marketplace. "They're going to be larger than the homes you'll find in the center of town.”
It is important for buyers to know they should secure a buyers agent BEFORE walking in the developer's door. Buyers can secure the services of a buyers agent to walk with them through the construction and purchase process at no charge, but the agent needs to be the first one to shake the hand of the developer. Otherwise, the developer will often not cover the agent commission in the transaction. To be sure you have the expertise and security of a qualified buyer agent in your transaction, let the agent accompany you to the developer's office before you initiate any contact. Contact me today to discuss your options with new home construction in the City:Cincinnati&beds=0&baths=0&min=0&max=100000000&map=0&quick=1&submit=Search" title="Search Properties in Cincinnati">Cincinnati and City:Dayton&beds=0&baths=0&min=0&max=100000000&map=0&quick=1&submit=Search" title="Search Properties in Dayton">Dayton areas.
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