I have the new construction data for Ada County as of the end of April ready for you. Unless you are a builder or an investor, you are probably not going to be a seller of new construction, so I am going to look at the data from a buyer’s perspective. To follow along, you can refer to the graphic I am using in the video.
Let’s consider a little historical perspective on new construction, first. Going back to 2009, the average price was $205,000. Our bottom was in 2011 for the existing home market, which has taken a little longer to get back up. The new construction market was a little quicker, but it did fall faster than the resale market.
Currently, the average new construction price in Ada County is an impressive $371,974. With all of the new construction subdivisions you see being built, you may think that it is way too much, but looking at the price the active sold and pending shows many homes sold over the last 12 months.
Under $150,000, there were three homes sold in Ada County in the last 12 months.
Under the $200,000 range, there is only one active listing, which has most likely not even been built yet. Looking at supply, there is less than half a month’s supply available. We are in a firm seller’s market. In fact, for new construction, that seller’s market goes all the way to the $800,000 price range.
Builders are controlling things. But, they also have a lot of pressure from landowners, developers, contractors, suppliers, etc, which is driving up prices. Also, with the low inventory, they can afford to do that, which you can see from the numbers.
Builders want to build more home and buyers would benefit greatly from it because it would take the pressure of the pricing.
From $300,00 to $350,000 there were 488 homes sold while at the $350,000 to $400,00 range there were 451 homes sold in the last 12 months. Over 600 homes were sold in the $400,000 to $500,000 price range.
And, they still cannot keep up with demand. If they were, the inventory numbers would be showing four to six month’s inventory. Builders want to build more homes and buyers would benefit greatly from it because it would take the pressure of the pricing.
Where it gets really interesting with new construction is the original price versus sold price. The ratios are continually over 100% which means that the original price that the builders are asking is less than what the property ends up being sold for because of buyers adding in upgrades. They are adding granite and hardwood floors instead of laminate and linoleum. They may also be adding in closing costs. This is very common because the advertised price for a new construction home is typically not what you end up paying. The buyers are adding the costs to their mortgage since they can get a mortgage at a still historically low rate.
Days on market are usually skewed in new construction because they do what we call “to be built.” This means they have a lot that they can build a house and can build this house and so they have to find the right buyer.
Long story short, new construction can be a great way for you to find a home and they’re still just not enough new subdivisions popping up. So, if you see developers and builders, know that they are doing us a big favor in the real estate market and they cannot do it fast enough.
If you have any questions or a topic you would like me to discuss in the future, reply to this and you can get a $25 gift card to a restaurant or business of your choosing.
If you would like any help buying new construction, please reach out to me by phone or email. I would love to advocate on your behalf on your new construction purchase.