There’s a boom in selling new houses. How will it influence prices?

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Florida Times
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The sale of new houses in the United States has soared to levels not seen since 2006. Several factors contributed to this trend-building situation in the real estate market, which has a profound effect on house prices while giving a major boost to the construction sector.

The pandemic stimulated interest in larger, courtyarded houses in the suburbs and thus far from the city centre. At the same time, quarantine prevented purchases from being made in the seasons that are most active in selling houses, which caused them to occur in the summer.

Sales of new homes in August exceeded one million, according to a Census Bureau report issued last week. The current inventory of new homes for sale would reach just over three months.

At the same time, owners of existing homes are avoiding putting them up for sale. With such a low supply, demand for new homes is growing and at the same time prices are rising.

HOW MUCH IT COSTS TO BUY NEW AMERICA

The average price of new houses in August reached $312,800.

“More new houses have already been sold in 2020 than in all of 2019,” Danielle Hale, chief economist at Realtor.com.

“Since the number of existing houses for sale has steadily and significantly declined from the previous year, new houses are an important segment of opportunity for home buyers,” Hale added.

Millennials, for their part, are reaching their best productive years to buy a home, while already beginning to have other aspirations for where their families will live.

This confluence of factors causes prospective homebuyers to face a difficult situation: while low interest rates reduce the cost of a mortgage, the limited supply of existing houses creates tough competition for new ones.

FLORIDA, LEADER IN NEW HOME INVESTMENT

A new porch site report indicates that Florida ranks fifth in the country among those who invest the most in new homes.

The analysis, which is based, among other parameters, on the number of new homes allowed to be built in the first six months of 2020 per 100,000 inhabitants, indicates that 77,956 new homes have been given in Florida. That means 366 units per 100,000 residents.

In the Miami-Fort Lauderdale-Pompano Beach metropolitan area, 12,385 new homes have been authorized, meaning 199.8 per 100,000 residents. The average price of housing is $308,522, while in the country it is $253,527.

As for Florida’s small towns, more will be built in The Villages, Sumter County, where communities predominate for over-55s and retirees. It will also be built in Punta Gorda, and among the midsize metropolitan areas leads Cape Coral-Fort Myers in the first place; Naples-Marco Island, eighth; and Ocala in the eleventh.

The report also indicates a boom in the construction sector, especially in states such as Arizona, Idaho, Utah, South Carolina, Texas, and Florida, which accumulate more permits for new homes.

That will certainly have a positive effect on employment in that sector. According to the Bureau of Labour Statistics, employment for construction workers is expected to increase by 12% by 2026.

TELEWORK INFLUENCES HOME SALES

A recent analysis by Zillow indicated that nearly 2 million families renting in the United States could buy a home because of the advantages of telework. Many of them, especially millennials, had been extending this goal in their lives because they cannot afford housing prices in the city center.

A Zillow forecast indicates that home sales will peak in the fall and then begin to decline gradually, but always maintaining higher levels than pre-pandemic times.

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