New Homes Charleston SC: Options For Buyers, Competition For Sellers
New construction is taking off nationally, so here are some national numbers as well as what is happening with new homes Charleston SC.
When the real estate market crashed years back, new construction disappeared in many markets. That wasn’t the case in Charleston. However, looking at the most recent numbers, new construction is back in full force.
For instance, new construction homes sold this January compared to last year are up by almost 25,000 units.
To get an idea of the sales trend for new construction homes, here is a look at new construction sales since 2012:
This is good news for buyers, but news sellers need to take with some caution–a little more on that in a bit.
But first, let’s take a look at what is going on with new homes in Charleston SC.
First, a look at the total Closed Sales in the Charleston SC market over the last 3 years (all home types included, not just new construction):
Now, here is that data broken down to strictly Closed Sales for just new construction homes:
Nationally, builders are increasing their inventory from last year. They understand the current market–there is a strong demand for housing out there, but not enough inventory.
Here is a look at the inventory of new construction homes:
New home inventory is up 8% over last January. It is creeping closer to the 6 Month Supply level indicative of a normal, neutral real estate market.
For comparison sake, here is a look at our overall National Months Supply of Inventory:
That number has been on the decline, but inched back up in January.
However, the builders are ahead of the rest of the market, recognizing the demand that exists.
The next couple months will be interesting to see what happens with these numbers.
Traditionally, Spring brings out the sellers.
Usually, the buyers as well.
However, this year has shown that the buyers are already out there and aren’t waiting.
That is already happening on the local level. Here is a look at New Listings of new construction homes in Charleston SC:
As you can see, that number has shot up. Charleston sellers should take note.
New Homes Charleston SC: What Do The Numbers Mean For Buyers?
For buyers, new homes are an attractive option. You have more control on the final product by being able to choose options for the floor plan, as well as finishing touches.
The downside of having more control is you have to wait. Depending on permits, it can take 4 to 6 months for a new home to be completed.
Of course, it is possible to take advantage of one that has already been started, but you don’t always get change the plans to exactly what you want.
The main thing for buyers is new homes offer another option. And based on the latest data, many buyers prefer new homes over existing homes. In fact, they are willing to pay a premium for a new house (see below).
The one caution buyers should have with new construction homes is in dealing with the builder.
When you first walk into the sales office, you will be greeted by a sales agent. They will be able to show you floor plans, lots, design options and even be able to write up a sales contract for you.
However, it is important to know that the sales agent is a licensed real estate agent and the builder is their client. They are obligated to look out for their client’s best interest, not yours.
That is not to imply that they are shady, or that they will give you a bad deal.
However, you are entitled to have your own agent representing you and looking out for your best interests. Best of all, it does not cost you anything to have your very own agent represent you.
Simply give me a call before you go to the builder, and I can make sure you get the best deal possible. I can also ensure that the closing process is smoother, and that you will be best protected along the way.
New Homes Charleston SC: What Do The Numbers Mean For Sellers?
If there is anyone out there that should be paying attention to the real estate numbers, especially the new construction numbers, it is the sellers.
Right now, as I mentioned, we are short on inventory. Buyers have clearly showed that they aren’t waiting for Spring to buy, and neither should sellers wait to list.
Perhaps this is contradictory to what you may have heard.
Maybe you heard that home sales are down. Well, here is the latest numbers:
So while it is true home sales declined from December to January, they are up compared to last January.
Another graphic I shared in a recent post shows that buyers are out there, right now:
You can read that post in full here.
The point is, buyer demand remains high, but inventory is not keeping up.
Builders recognize this and are reacting to take advantage of the market.
Sellers should as well.
With Spring around the corner, I expect to see the number of listings increase.
However, these sellers will provide more competition. You also have to factor in the competition of new construction homes.
The next few graphs will better illustrate the competition sellers face when selling against new homes:
This information comes from the 2014 Profile Of Home Buyers And Sellers from the National Association of Realtors.
Among the reasons buyers prefer buying a new home include purchasing a home that does not need repairs, more control over the design, and amenities offered by new communities.
But the one that sellers should pay attention to is the 10% that cited a lack of inventory of existing homes.
It is also important for sellers to realize that buyers not only prefer new homes, but they are willing to pay more for them:
Another interesting tidbit from the NAR Profile–reasons buyers prefer existing homes:
9% of buyers preferred an existing home because of the lack of inventory of new homes.
So, that basically just cancels out the 10% that prefer new homes because of the lack of inventory of existing homes, right?
Not necessarily. Which segment do you think is moving faster to meet this demand?
Plus, they know buyers are willing to pay more for a new house.
Does this mean anyone can list their home and have it sold in a matter of days?
Buyers are smarter then they ever have been thanks to the internet. Despite the high demand, buyers are not going to overpay for a home.
They would much rather spend extra money adding some extras to a new house–they see the value in doing that–rather than overpaying for an existing house.
In order to beat the competition, you have to stand out above them. Buyers like new houses because they are new. They do not have to worry about fixing issues down the road, especially things that the previous owner should have kept up with.
A smart seller will make sure their house is in good repair and looks like a model home when it is listed. It is also very important to have it priced right. Do these things and you can get sold quickly, no matter the competition.
If you are looking to sell, bee sure to visit my Pam Marshall Realtor sellers page.
If you are thinking about buying new homes Charleston SC, then contact me on my Pam Marshall Realtor website, or directly at 706-490-0055.