This article came from https://www.realtor.com/ and it is another key to how the housing market is strong and viable even in today's Covid-19 world. I worry how good can it get? As I have mentioned in many blog post before from 2008-2018 there where no new median priced homes built because of the regulations and lack of money in the system.
You remember the fences around the new home construction sites for basically 9 years before the contractors started building medium priced homes again. Imagine no medium priced vehicles being built for 10 years?
"U.S. home builders began construction on homes at a seasonally-adjusted annual rate of 1.496 million in July, up 22.6% from the previous month and 23.4% from a year ago, the U.S. Census Bureau reported Tuesday. The pace of home building is now 7% down from the pre-coronavirus high."
Fast forward until today and home builders can make money on medium priced homes and they are building them. 22.6% is a huge increase and it should go up from there. The homes for sale inventory is low and the priced are increasing a bit. I think that will be going on until there is an adjustment up on the interest rates.
"All regions experienced an overall uptick in housing starts despite rising coronavirus cases across many parts of the country, led by the 35.3% increase in the Northeast."
It will take more time in some areas to build, because of the permit process and city codes. Some cities are stricter than others which usually means more time to build. Even with the increased home starts the northeast takes longer to build usually than a lot of the United States. In the west Phoenix Metro they can put up homes quickly because of the city codes and more workforce.
" Americans’ demand for homes was at a fever pitch before the pandemic, and it’s now returned in earnest. Low mortgage rates have made buying a home a more affordable proposition for millions of Americans, while the reality of living, working and attending school at home has prompted many households to search for bigger properties, particularly in the suburbs."
New homes make prices go up after they are resold. This usually means that after the new homes are sold and then sold again it will effect home prices around it. We watch where the homes are being built and for how much. For example I am currently watching a new home build in Cleveland Metro that is selling for $500,000. If these properties resell for that price or more then it will effect the areas around it a lot. That will be great for my clients and their investments.
Watch your area and see how much new home builds are selling for and what they will sell for in the future it will effect values in your area,
Need real estate for yourself or your portfolio.
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Thank you