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!