In the realm of real estate, new construction homes have taken the center stage. Recent data from 2023 showcases the burgeoning presence of new construction homes, especially in the Florida metros, amidst a nationwide homebuilding boom.
The U.S. housing market has seen some extraordinary shifts in recent years. According to a report from Redfin, the second quarter of 2023 marked the highest share of new constructions on record, with a staggering 31.4% of all single-family home listings being newly built homes.
This trend is especially notable when juxtaposed against pre-pandemic data from 2019, which recorded just 17% of listings as new constructions.
Understanding the Rise in New Home Listings
Three significant factors are propelling this surge in new constructions:
1. The Pandemic-Driven Homebuilding Boom
The unprecedented demand for homes during the pandemic in 2021 and early 2022, coupled with historically low mortgage rates and the new norm of remote work, spurred builders into action.
2. A Dwindling Number of Existing Homes
While the rate of new construction has slightly diminished from its pandemic peak, the significant drop in existing homeowners selling means that new builds still represent a vast proportion of the available listings.
3. A Surplus of Inventory
Elevated mortgage rates over the past couple of years curtailed home-buying demand, leaving builders with surplus homes.
While many of these homes have since been bought, the inventory of new constructions remains high, increasing by 4.5% year-over-year in June 2023.
Shauna Pendleton, a Redfin Premier agent based in Boise, ID, elaborates on this trend. “New constructions are becoming the go-to for many potential homeowners due to dwindling listings from existing homeowners.
Builders are even offering concessions worth up to $25,000 to entice buyers.”
A Glimpse into the Metro-Level Highlights
Where New Constructions Rule:
- El Paso, Texas leads with 52% of listings being newly built homes.
- Omaha, Nebraska (46%), Raleigh, North Carolina (42.1%), Oklahoma City (39%), and Boise, Idaho (38%) closely follow.
Where They’re Scarce:
- Honolulu has the smallest share of new constructions at just 2.8%.
- Other areas like San Diego (3.3%), Pittsburgh, Pennsylvania (3.3%), Oxnard, California (3.7%), and Detroit (3.8%) also lag in new construction listings.
Regions with the Biggest Surge in New Constructions:
- Tulsa, Oklahoma experienced a leap from 20% to 33%.
- Significant growth was also observed in Richmond, Virginia; Albany, New York; Phoenix, and Elgin, Illinois.
Regions with Notable Declines:
- Boise, Idaho saw a drop from 49% to 38.3%.
- Other metros experiencing declines include Austin, Texas; Honolulu; Allentown, Pennsylvania, and Houston.
Florida’s Landscape
Florida’s real estate market showcased mixed results. While most metro areas witnessed an increase in new-home listings, Lakeland was an exception with a drop.
The most significant year-to-year increase was recorded in West Palm Beach, with a 2.3 percentage point jump.
Concluding Thoughts
The changing landscape of the housing market, primarily dominated by new constructions, signals a transformation in buyer preferences and market dynamics.
Whether this trend will sustain remains to be seen, but for now, new constructions are ruling the roost.
The new construction home market has seen notable growth this year. This surge in new construction homes indicates a shift in buyer preferences.
You May Also Like
The Implications of 7% Mortgage Rates: A Guide for Homebuyers
Revolutionizing Real Estate Contracts: How Smarter Offers Resolves Key Challenges