Real Estate Information Archive

Blog

Displaying blog entries 1-2 of 2

Home Builders Ramp Up Construction Based on Demand

by Christie Cannon

Home Builders Ramp Up Construction Based on Demand

Home Builders Ramp Up Construction Based on Demand | MyKCM
 

If you’re thinking of buying a home, there really is no time like the present. With today’s low mortgage rates, you have a great opportunity to get more home for your money. The challenge is inventory. Like you, many buyers want to capitalize on these market conditions, and it’s leading to more buyer competition and bidding wars.

If you’re having a hard time finding a home to buy, it may be time to talk to your trusted real estate advisor about a newly built home. Early indicators show new-home construction is beginning to ramp up. While new homes alone won’t be able to fix all of the inventory challenges, this does mean you’ll soon have more options as you search for a home. As a buyer, a newly built home may be exactly what you’re looking for – it’s brand new, and with builder customization options, it’s uniquely yours from the ground up.

Here’s what industry experts are saying about new homes coming to market:

Nadia Evangelou, Senior Economist and Director of Forecasting at the National Association of Realtors (NAR), says recent research could indicate upward momentum when it comes to new home construction. Evangelou refers to the volume of new homes where construction began during a set period, known in the industry as housing starts.

According to that research, housing starts reached their highest level since 2006 in March of this year – an encouraging sign for the industry. While they dipped slightly in April, Evangelou reiterates that the level of housing construction is heading in a positive direction compared to recent years:

“…we are currently building 24% more homes than we typically have built in April in the last couple of decades. Thus, housing construction is trending upward with housing starts likely to reach 1.6 million for all of 2021 and rise further to 1.7 million in 2022.”

As new data pours in, it further confirms this trend. According to the latest Monthly New Residential Construction report from the U.S. Census Bureau, housing starts increased even more in May, which continues the ongoing upward trend (see graph below) and indicates that ground is being broken on even more new homes.Home Builders Ramp Up Construction Based on Demand | MyKCMRobert Dietz, Chief Economist and Senior Vice President of Economics and Housing Policy for the National Association of Home Builders (NAHB), singles out another encouraging sign:

“It is also worth noting that the number of single-family homes permitted but not started construction continued to increase in May, rising to 142,000 units.”

This insight that there’s also an uptick in single-family homes permitted serves as an additional sign that more new homes lie ahead. It’s important to realize that the construction doesn’t have to start on these homes before you may be able to purchase one. According to the Monthly New Residential Sales report from the U.S. Census Bureau, many new homes are selling before construction even begins (see graph below):Home Builders Ramp Up Construction Based on Demand | MyKCMThese signs are all good news for housing inventory. And as the recent challenges of rising lumber prices and dwindling lumber supply begin to improve, builders will be able to increase their production even more in the months ahead.

Bottom Line

While the inventory challenges we’re facing today won’t be solved overnight, the increase in new-home construction means your house may have more competition in the market. Let’s connect to talk about finding your dream home and the newly built homes available in our area.

Is Texas New-Home Demand Defying Gravity? A Look Market By Market

by Christie Cannon

Article by: Brad Hunter, Forbes Magazine

 

Despite the double-whammy of an oil price collapse and a global economic shutdown, the housing market in Texas is hotter than a stolen tamale.

New home permitting activity in Houston for the first half of this year is running at about the same level as it was in 2019, which is amazing enough. Sales at the largest and most active master-planned communities were up sharply in the first half of 2020 compared with the same period last year, which is nothing short of amazing.

New data from RCLCO show that sales shot up 21% at the Bridgeland community in Houston, up from 351 homes sold during the first half of 2019 to 425 in the first six months of 2020. Balmoral, a community in Houston developed by Land Tejas, is up 143%, and that’s off of an already high level of sales — 168 in the first half of 2019 and 409 sales in the first half of this year. Houston has become a highly diversified economy over the past thirty years, no longer dependent upon the oil extraction sector, and those industries that use oil as an input do better when oil prices go lower.

And it’s not just Houston. Austin master-planned communities are hotter than a fur coat in Marfa. Easton Park, by Brookfield Residential, saw a doubling of sales since early 2019. Sunfield, a development by Scarborough Lane, is up 33% in the first half, and Santa Rita Ranch, by Mariner Real Estate Development, is up 30%. These are incredibly strong increases, particularly during a period of economic disruption.

In Dallas, some new-home developments are moving even faster. Hillwood Communities’ Union Park master-planned community saw a 64% surge in sales, and Viridian, a community belonging to Johnson Development, saw a 37% increase. Johnson Development’s Trinity Falls project surged 65% in the first half. Also in Dallas, Wood Creek, by SouthStar Communities, sold 247 homes in the first half of 2020.

Demand is strong while supply is tight. The inventory of homes available for purchase remains extremely limited throughout Texas, and the shortage got worse during the current crisis. The biggest decline in listings has been in the Austin area were there were 32% fewer houses listed for sale in June compared with June 2019, according to the Texas Realtors’ Association. The low levels of supply are keeping prices high.

The concern on the demand side is of course the Covid wild card. Cases are surging in Texas, and this could still cause problems in the economy and in real estate, but so far the pandemic has not held back housing. Some builders report that people are more eager than ever to buy in their suburban communities in order to get away from crowded cities or to get out of a dense apartment building.

 

Click here for the article website!

Displaying blog entries 1-2 of 2

Syndication

Categories

Archives

Share This Page

Contact Information

Photo of Christie Cannon Real Estate
Christie Cannon
Keller Williams Realty
5933 Preston Road #300
Frisco TX 75034
972-215-7747
Fax: 972-215-7748
Keller Williams Frisco - The Christie Cannon Team - http://www.christiecannon.com