In the current real estate market, prospective homebuyers are facing a major challenge - the limited supply of homes for sale. With fewer options available, finding the perfect home can seem like an uphill battle. However, there's a glimmer of hope on the horizon: the growing market for newly built homes. In this article, we'll explore the significance of new residential completions and how they can offer a viable solution for those struggling to find their dream home.
The Current Housing Dilemma
The National Association of Realtors (NAR) has recently reported that the inventory of existing homes for sale is at approximately half the level it was in 2019. The lack of available properties is putting a strain on homebuyers and is most evident during what is typically the busiest season for real estate. This low inventory situation has been compounded by the fact that builders have not constructed enough homes to meet the historical average since the 2008 housing crash.
New Residential Completions: A Bright Spot
One key metric indicating a positive shift in the market is the trend of new residential completions. These completions represent newly constructed homes that are now finished and ready for occupancy. The graph provided by the Census reveals a crucial insight: leading up to the 2008 housing crash (orange), builders exceeded the long-term average for finished housing units, resulting in an oversupply and declining home values. Since then, new home construction has not kept up with the historical average (red), leading to a persistent inventory deficit. However, the recent data indicates that builders are currently matching the long-term average for residential completions (green), bringing more newly built homes to the market than seen in recent years.
We can see the shift of new builds happening all over OC. From the Great Park to Lake Forest, to Traduce Canyon and Mission Viejo, and down to San Juan and San Clemente. The homes are being sold faster than they can be built and prices are reflecting that as well with an increase in prices with every new phase released.
Residential Starts and Permits: A Promising Trend
Not only are residential completions increasing, but the upward trend extends to residential starts and permits as well. "Starts" refer to homes where construction has officially begun, while "permits" are for homes where builders are planning to break ground soon. The fact that both of these metrics are on the rise suggests that even more newly built homes will be hitting the market in the near future.
Not only are there new builds that are move in ready in OC, but there are plenty of neighborhoods that are in the "start" and "permit" phase. Rancho Mission Viejo just released the names and home details of the newest phases of Rienda. There are 6 new "neighborhoods" that will be built around a community plunge pool. Homes will range from 3 story townhomes starting in the low 500's to single family homes at over $1m.
Expanding Your Options
For homebuyers struggling to find a suitable property, the surge in new home construction offers a lifeline. With more homes being completed and more in the pipeline, the pool of available options is set to grow significantly. Those in a hurry to move can take advantage of recently completed homes, allowing for quick and seamless transitions. On the other hand, if time permits and customization is appealing, considering a home that's still under construction may be the ideal solution. Working with a trusted real estate agent is essential throughout this process, as they can offer guidance based on your unique needs, preferred neighborhoods, and other essential factors.
In a market where the supply of existing homes for sale is limited, turning to newly built homes can be an excellent strategy for expanding your options. The increase in new residential completions, coupled with the growth in residential starts and permits, indicates that the market for new construction is gaining momentum. Whether you're looking for a completed home or one in the process of being built, a knowledgeable real estate professional can be your greatest asset in navigating the current housing landscape.
If you're having trouble finding a home that suits your needs, consider exploring the possibilities of new-home construction. Reach out to a local real estate expert to discover the newly completed and upcoming projects in your area. With their help, you can find the perfect home that aligns with your preferences and lifestyle.
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