Where are all the new homes? Why are the builders so far behind? Can’t we just build our way into more inventory?
1. How do you find out about New Construction in your marketplace? What questions should you be asking?
2. Who is building what and where?
What is the registration process for your buyers?
Which builders have waiting lists?
*Know before you go or before your buyer does.
-MLS. -NewHomeSource.com -NewHomeGuide.com
-Your local newspapers and lifestyle magazines
-Builder’s own websites
3. What’s up with lumber? As the pandemic crushed the US economy last spring, sawmills slowed or shut down lumber production in anticipation of a housing slump, but that slump never happened and now there isn’t enough lumber to feed the demand of today’s super hot, inventory-starved market.
The surge in lumber prices in the past year has added $35,872 to the price of an average new single-family home and $12,966 to the market value of an average new multifamily home, according to the National Association of Home Builders.
About 1 in 4 homes for sale are now newly built, the highest share ever. Historically new homes make up about 1 in 10, but fierce buyer competition is behind that shift.
New lot (land) supply is down by 20%
Lumber prices seem to set a new record almost daily, now up 67% this year and up 340% from a year ago, according to Random Lengths, a wood products industry tracking firm.
Even the cost of drywall is up 7%, year over year.
Steel is up 18% year over year.
Average cost per building lot is up 11% year over year and supply of lots to buy is down 20%.
4. The result is a combination of delayed delivery for existing contracts, waiting lists for new construction purchases and sticker shock for what price you’ll pay for new. Even renovations are stymied due to the inflation in costs and lack of availability of materials.
Even with all of those facts, the demand is there:
“While lumber prices have gone up, we have been able to pass it on to the consumer with higher prices for homes,” Jeffrey Mezger, the CEO of KB Home (KBH), told CNN Business. “And there is still far more demand than there is supply.”
Even multifamily new builds are costing on average $12,000 more to build, causing rents to be $119 more per month as a result.
5. No one knows when we’ll get all of this demand supplied with fresh housing, but this is inspiring several 3D printing companies to get serious about building houses. A 3D printed house costs half the time, half the money and only takes a crew of 4 to build it! When there’s a need in the market, new innovations have the opportunity to fulfill that need. Watch out for new solutions to the inventory challenge!
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