Low Market Inventory Driving Up Prices

Low Market Inventory Driving Up Prices

Spring is officially here and thousands of buyers are all encountering the same problem when it comes to house hunting: extremely low inventory.  The construction of new homes is down roughly 0.6% from January, yet has increased by roughly 0.5% since February of 2017.  

The housing market is off-balance, to say the least.  In a “usual” market, one out of seven homes sold is considered “new”.  In the current market, one out of ten homes sold is new.  

Related: “Buying a Home Site Unseen: 4 Things You Should Know” 

The bottom line: there just aren’t enough affordable homes to go around.  With the current median price of newly constructed homes hiked up to $326,800, almost 0.6% from the previous month and 9.7% from last year,  many buyers are looking for existing homes at a median price point of $241,700.  New construction will cost buyers a pretty penny due to amplified land values, intense labor expenses, and the cost of building materials.  Buyers hoping to purchase a new construction home will have to fork over even more cash should they wish to include the latest designer fashions, top-notch finishes, and high-end appliances.  

Of the newly constructed homes purchased in February, roughly 13% were priced below $199,999 while the majority, or 58%, ran between $200,000 and $399,999.  Twelve percent were priced between $400K and $499,999 and seventeen percent ran $500K and higher.  

The South was responsible for the sale of most new homes, roughly 338,000, in February at a nine percent increase from January and 0.6% hike from February of 2017.  The West came in second, roughly 164,000 new home sales, at a 17.6% monthly decline and 3.1% annual increase.  In third place, the Midwest was down 3.7% from January at roughly 79,000 home sales and 8.1% from the previous January.  The Northeast experienced a 19>4% increase from the prior month at a meager 37,000 home sales.  

Here’s the deal: sellers are in the driver’s seat due to current market conditions.  

For more information, contact The Aitken Home Team today!

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Phil Aitken, Owner/Broker
Phil Aitken is the Owner/Broker with Your Home Sold Guaranteed Realty - Phil Aitken Home Team and has over 13 years of Real Estate experience. Phil’s faith and desire for his family’s continued security fuel his business growth and leadership. The Phil Aitken Home Team continues to profoundly impact the people of Jacksonville via supporting several faith-based organizations. Phil gives back a portion of every real estate transaction to The Tim Tebow Foundation and Rethreaded. Find Phil's full story here.