If you are like many homebuyers you wonder about where to find houses for sale in today’s tight market; it can become a major headache for those seeking to purchase a home. We are all familiar with the laws of supply and demand, and those laws apply to the housing market as well. When it comes to home availability, there are the obvious factors that impact supply and demand, such as the death of an owner, marriage where both bride and groom own homes, and foreclosures. Recently, there has been an uptick in buyer demand, and the available supply for purchase has dropped behind. What does that mean for you as a homebuyer? A few things lets take a closer look at how the demand for housing usually outpaces supply.
Up and Down Numbers for New Home Construction
The number of new housing permits issued prior to the great recession increased for fifteen consecutive years from 1990 until 2005 (1.12 million in 1990 jumping to 2.16 million in 2005). During that period, the amount of single-family permits awarded more than doubled. During the same period, the amount of multi-family permits increased by a whopping 49 %.
As a result of the housing market crisis, the number of new homes permitted dropped to its lowest level in 2009. Since then, the normally stable supply and demand have been unbalanced when it comes to new construction. The number of new homes being built has recently been slowed even further by the COVID19 pandemic. This trend is significant because there has been a migration from states such as New York and California to southern states. Because of the lack of new construction, people are paying higher rates to rent an apartment or home.
Construction of single-family homes has improved much more slowly. However, PGT Innovations who make shatterproof windows saw their sales increase by 20% in the fourth quarter of 2020. Companies such as PGT Innovations sever as a bellwether that new home construction is on the rise. But such signals can be murky because Home Depot had shown an increase in sales for the same time period which could mean new construction is on the rise, or that more people are remodeling their current homes rather than have a new one built.
Why is New Construction Important?
As the U.S. population expands, the demand for new home construction expands with the population. At the moment, new construction is being outpaced by the growth in the nation’s population. For example, the total number of residential housing units permitted in 2018 was approximately equivalent to the number of permits issued in 1994, a year when the country’s population was 20 % less than it is today.
It Won’t Add Up
Essentially, the decrease in home building combined with a steadily growing U.S. population indicates that there is now a selling opportunity for homeowners who want to capitalize. Without a doubt, it is a seller’s market as long as new construction remains stagnant. Will the amount of new home construction increase in 2021? It depends on if the pandemic is ebbing and the state of the economy.
If you’re thinking about selling your home to move up, there is certainly demand, but short of moving to another city or state, you will be hard-pressed to find a newly built home to which you can move.
If you are a homebuyer and looking for a professional Florida realtor, then visit the website Megan Dowdy Realty. They offer home buying, selling, relocation, and real estate investment services. For further information, call on 407-509-9279.