New Construction and Buying a House in 2018
Many are optimistic about 2018 turning the housing supply around, thanks in part to new construction. The last few years have seen buyers that are able to get low interest rates on loans but no houses to purchase. The houses that are available are rapidly growing in price as well, making it even harder for buyers to land a property.
Many of these problems are not likely to be fixed in 2018. However, there will be a small influx of properties coming onto the market due to new construction projects.
New Construction
There are new construction projects that planned to be built in 2018. However, these properties are going to be built and completed slowly. There are many constrictions on the construction market and this is making it hard for new properties to be built as quickly as the market demands.
There will be over 650,000 new builds available in 2018. While any new builds are better than none, this is a sharp decline compared to the past few years. This amount of new homes is not nearly enough to satisfy the many people looking to buy in 2018.
First-time homeowners may find it hard to purchase one of these new builds. Buyers that are just starting out will not have enough money to be able to afford these houses. Many will start at $350,000, which is well above the average price of homes across the nation.
High Prices
Construction companies are having trouble keeping up with demand because of a shortage in land. There is just no land to purchase to place these new properties on. The cost of the building materials is forcing houses to cost more to compensate, and many construction companies are having a hard time funding these builds. Combining this with a lack of people to work is creating a stagnant construction environment.
With the new tax laws, there are fewer homeowners that are inclined to sell their homes. With fewer homes being built, and fewer homes being sold, the housing market has far too much demand. This is pushing prices up for the houses that are being sold.
Homes That Are Constructed
There are going to be smaller, urban villages that will spring up with these new builds. These areas concentrate on making all businesses within a walkable distance from the houses. The properties will be built to have more variety to include a range of apartments, condos, and houses. Essentials will be available in terms of grocery stores and some entertainment.
Townhouses may become more popular. This type of property will cost construction companies less to build. They also take up much less land, which leaves more room for other builds. Many companies are looking to demolish old buildings to make room for new constructions.
The areas that will see the most growth in new builds are in the South. There are many cities in the South that have seen an influx in economic prosperity, an increase in jobs, and have sustained a lower cost of living, making them an ideal spot to put these new builds.
Buyers will not see much change in the market in 2018. It will continue to have overpriced homes in a very competitive market. There will be some new construction builds that could help increase the housing inventory, but they are likely to be out of first-time homeowner’s price range. For someone wanting to buy in 2018, it will be an uphill battle to be prepared for.