Real Estate Pro Articles

I Don't Care...I Want a New One!

[Valid RSS feed]  Category Rss Feed -
By : Lauren Spencer    99 or more times read
Despite an over abundance of homes on the market, it seems there is increasing demand for new homes. March and April have produced gains in the sales of new homes that have not been seen in 47 years, and although the numbers are still down from the peak during the housing boom, it is definitely a trend that cannot be ignored.

Nationally, newly built single-family homes saw sales numbers spike 14.8% in April and 29.8% in March; resulting in an increase of 47.8% over 2009 figures. With total units sold reaching 504,000, almost 80,000 more than analysts had predicted, many are left speculating the cause of this sudden burst in activity.

It would make sense that in a country with 2 million vacant homes for sale (Census Bureau figure), many of which are foreclosures and short sales with drastically reduced prices, there would be little demand for new home construction; however, throughout most of the nation this is not the case. In Las Vegas, for example, where there are over 9,500 recently built houses sitting empty and thousands more waiting to be released by the banks as REO's, contractors are building over 1,000 new homes and still struggling to keep up with consumer demand. This trend seems to be the norm in most areas of the country where new home sales for April were up 31.6% in the Midwest, 21.7% in the West, and 10.8% in the South, with the Northeast being the only region reporting no change.

These figures are great news for unemployment rates in the country as construction workers lace their boots back up, although many experts are cautioning that this trend may be short lived and is merely the result of the surge in real estate activity created by the home buyer credits offered by the government which came to an end April 30. Moody's Economist Mark Zandi states that the credit "juiced up sales as much as 125,000 new homes" citing that "new-home sales would have been closer to 375,000 if not for the credit", instead of the reported 504,000. Mike Larson of Weiss Research has said in a recent report that "even if new home sales manage to hang on, a recovery in the overall market still faces a towering obstacle... the used home market is still oversupplied, and will remain that way for some time thanks to a continuing influx of distressed and foreclosed property".

So why the surge in new home sales? Aside from the home buyers credit some other factors come into play. Thanks to the recent recession the cost of land, labor and materials have dropped considerably which means new homes can be constructed and sold for less than new homes that had been built during the housing boom; homes that remain vacant in developments that resemlbe ghost towns. Another issue to consider as fuel for this trend is the foreclosure/short sale market. Indeed, there are some great deals to be had on these properties; however, the length of time to close the deals, the condition of the homes and the neighborhoods they are in, and the competition from investors that can pay cash, make this market very difficult to enter for first time buyers and average Joes. We also cannot discount the American desire for consuming the newest and best of everything.

So, even though this trend is very real, it is difficult to determine what is driving it and how long it will last. While the savvy investors are scooping up great deals out of the massive housing surplus, others are choosing to buck up and buy new; after all, why would you want a home that someone else has lived in...Yuk!!
Everything you need to know about homes in Santa Cruz is right here at Lauren Spencer, Coldwell Banker Realtor will be glad to answer your questions about Cliffwood Heights CA real estate.

Related Articles

Print This Article
Add To Favorites




© All rights reserved to Real Estate Pro Articles