HOUSTON – (Realty News Report) – More than 35 percent of Houston’s single-family homes for sale in the first quarter were newly constructed homes, according to Redfin.
Builders’ share of the market has been climbing nationwide, and housing starts have increased significantly.
New-construction properties have steadily taken a larger slice of the market over the past decade, but the pace accelerated during the coronavirus pandemic. Redfin Lead Economist Taylor Marr cites two main reasons: a rise in homebuilding and fewer Americans listing their homes for sale.
“Building homes became more attractive and profitable during the pandemic because of record-low mortgage rates and strong buyer demand,” Marr said. “At the same time, many homeowners chose to stay put and either refinance or remodel their existing homes instead of selling, which allowed new-construction inventory to claim a bigger portion of the market.”
Nationally, 25.7 percent of single-family homes for sale in the first quarter were new construction, Redfin reported — up from 20.4 percent a year earlier and the highest share on record.
El Paso led Redfin’s analysis of 82 U.S. metropolitan areas, with 53.2 percent of single-family listings being newly built. Boise, Idaho followed with 46.7 percent.
Houston ranked No. 3 with 35.5 percent.
“New construction is often appealing to buyers who want to avoid bidding wars, since builders typically don’t set offer deadlines,” said Redfin Houston agent Melanie Miller. “Buyers also like that they can often purchase a new home at the listed price rather than offering well above asking. However, inventory for new construction is tight and prices are rising for many new and pre-construction homes because lumber and other input costs have increased. I had a buyer agree on a price with a builder, and the builder called the next day saying they couldn’t hold that price because their suppliers had raised costs.”
In Houston, single-family home sales were up 24.4 percent in March compared with March 2020.
U.S. housing starts — the count of new residential construction projects — jumped nearly 20 percent month over month in March, reaching the highest level since 2006. That increase signals that homebuilders are growing more bullish despite lumber shortages and higher construction costs. At the same time, listings of existing homes declined.
Many pandemic-era buyers turned to new construction to avoid intense bidding wars, as newly built homes have historically faced less competition. But the national housing shortage has become so acute that some builders now have waitlists with as many as 90 eager buyers, said Redfin’s Salt Lake City market manager Ryan Aycock. Some builders have even canceled contracts when buyers refuse to accept price increases.
May 3, 2021 Realty News Report. Copyright 2021.
File: Home Builders Grab Huge Chunk of Houston Realty Market
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File: Houston. Home Building. Redfin. Home Builders Grab Huge Chunk of Realty Market.