With inventory continuing to be at record lows in 2021, a new trend is developing in the real estate market regarding new-home construction. Building permits have hit the highest they’ve been since 2006 and are up 22% from a year ago.
“Land is just so hard to come by these days, so what we have noticed is builders are buying smaller plots of land inside cities/towns and building on those,” said Mike Krieg, a real estate agent for United Country Real Estate and builder in Colorado. “These urban infill type projects are getting really popular. They are giving people the opportunity to get what they want while also staying in their preferred location.”
Of the new construction being built, many of them are more energy efficient and have more technology integrated into the homes. It’s called “green building” and it is gaining momentum among current buyers in the market. The homes are specifically designed for the buyer and, while they may cost more upfront, they will save you money in the long haul.
“These are really high efficiency homes with modern technology,” said Krieg. “Even homes that are 10 years old don’t have these features and these are things buyers want. They are even willing to pay up to 12% more for them. They are going so fast that they are selling faster than we can build them at this point.”
While many buyers are excited about this growing trend, it doesn’t come without its headaches for others who are involved. Krieg predicts a “fight” among existing homes trying to sell and new homes being built. It can also be difficult for appraisers as the value of the homes steadily increase as they are being built. However, experts say the market for new-home construction remains favorable as we dive deeper into 2021.
A recent MarketWatch article reported, “Demand among homebuyers remains very high, driven by millennials reaching their peak home-buying age and households looking for more space in the suburbs. That high demand continues to be met by low supply in the market for existing homes, meaning that more first-time buyers are being pushed into the market for new homes.”
“The reality is, real estate is the key to wealth in the country, so it’s not slowing down anytime soon,” added Krieg.
For more information, please visit www.unitedcountry.com.