Here we are – it’s ten years since the housing downturn and we are seeing huge gains in new home sales and pricing.
In June 2018 John Burns Real Estate Consulting surveyed and recorded 358 metro ratings across 83 metro areas that confirm that demand for new homes remains strong, while low inventory and rising costs promote rising home prices.
The landscape looked very different when the consulting company initiated their Housing from the Frontlines survey in June 2008. The survey found 65% of participating builders rated current sales as poor, and 58% indicated they reduced prices month over month. Builders were drowning in finished homes, averaging over 5 per community, which contributed to falling prices.
Now it’s June 2018, 58% of builders report good current sales, with 59% raising prices (net of incentives) month over month. Very low inventory averaging 1.5 homes per community and rising costs drive strong price increases year over year. Changing demographics have continued to impact housing demand over the last 10 years. Our builder survey captures strong demand for new homes targeting 55+ buyers, as well as re-energized demand from first-time buyers.
Those in the 25–34 age brackets are living with relatives in 2018 - up from 20% in 2008. Although the Great Recession delayed employment and earning power for many young adults, our survey participants report strong demand for first-time buyers today. It is estimated that 50% of new households own a home at age 37 in 2018. In 2008, 50% of new households achieved homeownership by age 32, five years earlier than today.
The housing market for the 45 million baby boomers (61 percent are now over 60 years old) is very strong. Many baby boomers are retiring and looking for active adult communities that offer them many amenities. This group of homebuyers is not just looking at the usual places like Florida or Arizona to retire to – they are looking at Columbus Ohio, Indianapolis Indiana and we in Southern Nevada have seen a big rise in retires coming here as well. The homebuilders in Las Vegas have taken notice and more active adult communities have been built in the last few years.
Keep in mind that whether you are interested in buying a home or selling a home, a Realtor should represent you– this person is working for your benefit and will help you navigate through the buying or selling process. I have thirteen years in New Home Sales and sixteen years in General Real Estate sales!
Thanks and make it a terrific day…………Robin