With the supply of existing homes sinking, new properties now make up a bigger piece of the pie. We are starting to see that 1 in 5 homes on the market has been a newly built home. That’s up from closer to 1 in 6 last year and represents the largest share since at least 2012.
The inventory of existing homes has plummeted amid economic uncertainty and health concerns fueled by the coronavirus pandemic, with an increasing number of Americans choosing to delist their homes or not even put them up for sale in the first place. Meanwhile, the supply of new-construction homes has seen a relatively small drop, as builders and homeowners approach home selling differently.
Builders are focused on a bottom line and running a business. They need to clear their inventory as quickly as possible whenever necessary. Homeowners and new home purchasers, on the other hand, make the decision to move, list their home and sell it when the time is right for the right price.
Still, builders have been putting fewer houses on the market than they have been as they’ve had to halt projects amid restrictions on construction activity and permitting delays. New listings of newly constructed homes fell 12% month over month in April, though that pales in comparison to the 36.3% slide in new listings of existing homes.
With that, it would seem that many buyers are backing off and taking their purchasing a bit slower. Its also interesting to note that while prices of new homes slipped, existing home prices went up. Normally when it comes to prices, new homes are hit harder than existing homes because they tend to be less affordable. This has caused more people who are purchasing to buy new homes on the lower end of the new-construction market which brings down average price.
In any case, New home purchasers need representation when purchasing new construction or custom building sites. The site agent represents the builder 100%, so it's important that the buyer has representation for fair negotiation to ensure that someone is representing their best interest as well.
The housing market is becoming more interesting to navigate, but Verity is ready to take on the task. Contact us on our website or give us a call at 757.452.8974 if you’re interested in buying new construction!