As a hopeful home buyer, you're undoubtedly feeling the constraints of the current real estate market. Scarcity of available homes can make it seem like your dream home is just out of reach. But, have you considered looking into new construction homes? There's a wealth of opportunities waiting for you in this sector of the market.
As you grapple with the limited housing options typically available during the busy real estate season, it's worth noting that the market for new constructions is a beacon of hope. According to recent data from the National Association of Realtors (NAR), the availability of existing homes in the market is roughly half of what it was in 2019. But when you pivot your perspective towards newly built homes, the picture looks considerably brighter.
One valuable metric to consider in your home buying journey is "new residential completions." This term refers to homes that are newly built, completed, and ready to welcome a new owner. It's an important gauge to understand the trends in the housing market.
The graph below depicts the historical trends of new-home completions. The black line represents the long-term average number of finished housing units.
Leading up to the housing market crash in 2008, home builders exceeded this average, resulting in an oversupply of homes (indicated by the orange in the graph). As a result, home values plummeted, contributing to the housing market's collapse.
Following this crash, the pace of new home constructions fell significantly. The amount of new homes built failed to meet the long-term average, creating a deficiency in housing inventory (highlighted in red). This deficit is a significant contributor to today's scarcity in housing availability.
However, the future looks promising. As depicted by the green on the graph, the latest data from the Census suggests that builders are now matching the long-term average. This indicates an increase in newly built homes entering the market, a trend not seen in recent years.
Adding to this optimism are the rising rates of residential starts and permits. Starts refer to homes where construction has officially begun, while permits apply to homes slated to break ground soon. With both metrics on the rise, the promise of more new homes in the market is strong.
The increase in newly built homes offers a broader pool of options for prospective buyers. If you're ready to move now and the timing is critical, a real estate professional can help you explore recently completed homes in your area. Given that these homes are move-in ready, your transition could be seamless and quick.
Alternatively, if you're flexible with your timeline and the idea of customizing a home from scratch appeals to you, consult with your real estate agent about homes under construction in your preferred location. Buying a home that's still in progress provides you the unique opportunity to select features and finishes to suit your tastes, making it a perfect fit.
Your real estate agent is an invaluable resource throughout this process. They are equipped with up-to-date knowledge of what's available in your area and can offer recommendations based on your unique needs, preferred neighborhoods, and more.
The scarcity of inventory doesn't mean you need to compromise on your dream home. Exploring new-home construction can open up possibilities you may not have considered before. With the right support and knowledge, you can navigate the current market conditions to find the perfect fit for your family.
Don't hesitate to explore the realm of new-home construction if you're struggling to find a home that suits your needs in the current market. Connect with a local real estate professional today and discover the possibilities that await in your local area.
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