Safe to say, we’ve had a much colder and snowier start to 2019 when compared to the mild weather we experienced at the start of 2018. With that in mind, the current numbers (month’s of inventory) must be taken with a grain of salt, but inventory appears to be a touch high based on 2018 fourth quarter sales. However, rates reached 5% when sales began to slow and have since dropped to the 4.5% range which is encouraging. Inventory will need to, and should be, evaluated mid-year once we see where sales velocity ends up in the first and second quarters.
Looking at the overall new construction market as we enter 2019, January closed sales were down 39% from December and down 15.3% from January 2018. January pended sales were up 33.3% from the previous month and down 22.4% from last year at this time.
There were 1,511 new construction homes for sale in January, which is up 3.2% from December and up 8.1% from last year.
The average sale price of a new construction home in January was $365,000, which is up $31,000 from last year at this time. The average price per square foot for the month of January was $205, which is up $12 from last year at this time.
The new construction market had 1,179 single-family homes for sale in the month of January, compared to 1,122 homes at this time last year. That’s an increase of 5.1% and works out to 14.6 months of inventory based on closed sales and 11.1 months of inventory based on pended sales.
For single-family homes, the average price in January was $377,000, which is up $37,000 from last year. The average price per square foot for the month of January was $208, compared to $195 per square foot last year at this time.
In the multi-family new construction market, 324 units were for sale in the month of January, compared to 334 homes in January of 2018. That’s a decrease of 3% and works out to 32.4 months of inventory based on closed sales and 13 months of inventory based on pended sales.
The average sale price of a new construction multi-family unit was $254,000 in January, which is down $8,000 from last year. The average price per square foot for the month of January was $170, compared to $181 per square foot last year at this time.
The top new construction metro markets for single-family homes are: Ankeny, Waukee, Bondurant, West Des Moines, Norwalk.
The top new construction metro markets for multi-family homes are: Ankeny, Norwalk, Waukee, West Des Moines, Polk City.
As stated above in my opening, rates have reduced and are currently sitting in the mid 4’s. All indicators lead us to believe that the Fed has softened on their position of continual increases to hold off inflation. Recent economic releases are indicating that 2 rate increases are forecast for 2019. If correct, this should prove to have positive impacts for both the Building industry and Real Estate market as a whole.
For detailed information on New Construction Market data, feel free to contact me!