Who wouldn’t love a spanking brand new house? Demand is there, but supply has been a challenge. We’ve been reporting consistently in this column about the lack of inventory in San Diego and elsewhere. And at last, we can see some brand new product coming on the market. This is good news to weary home seekers.
New construction is a boon on many fronts; employment, for sure, and also a surge for related businesses – mortgage lenders, appliance and material providers, real estate brokers and all the other folks who support the industry. Investment in new construction is generally an indicator of an economy on the upswing, something we all seek.
Tracking for San Diego shows the issue of 538 building permits for single family houses in June; 1,500 for multifamily apartments and condominiums. Though this is a good number for the month, we are still below totals for 2015 and 2016.
Looking at nationwide trends the picture is a bit rosier, with 7.4 percent more permits issued in June over May. Realtor.com reports the number of new issues on the market at 1,254,000 keeping new units in line with prior year numbers.
The trend seems to be up though, and that’s a good thing because as Senior Economist Joseph Kirchner of the Web site tells us, this number is only about half the number required to keep up with demand.
Scanning the country, we find the South in the lead with 535,000 newly completed residences, followed by the West with 343,000; then the Midwest at 210,000 and only 115,000 in the Northeast. As the economy grows in all sectors, and unemployment dives, the need for new residences grows. Millennials are forming new families and with renewed job security, there is an ever increasing need in particular for this family-forming generation.
Of course, these new homes everyone wants do not come cheap. Often sporting grand finishes, stainless steel appliances and smart home features, the median price of a new home is 37 percent greater than a resale in a comparable location, this according to recent National Association of Realtors data collection.
Nonetheless, construction is happening. 1,203,000 houses were completed in the month of June nationwide, up 5 percent from May, 2017 and 8 percent from June, 2016, just in time for children to go back to school. This period is usually the most desirable time to offer new properties for just that reason.
Maybe it’s those HGTV shows featuring gorgeous open concept homes with kitchen islands, granite countertops and gleaming bathrooms, but so many of us would just love one of those glorious places to call home. With the stock market climbing to new heights, full time employment up and still relatively low interest rates on mortgages, there just could not be a better time to put a pretty new place on the market. Scoop one up if you can!
