Poor weather conditions, volatility in the stock markets, potential trade wars and rising interest rates are new topics of conversation within the building industry as we move into the 2018 season. These topics are in addition to concerns surrounding the rise in ground prices, material costs and the shortage of labor in our industry. Well, one might think that’s a bunch of gloom and doom. Not really, that’s just an example of the many variables builders deal with every year in their industry.
The fact remains that consumers will still purchase homes in 2018. Need-based moves (graduates, growing families, divorces, relocations, etc.) will still exist. As will want-based moves (upgrading, school district, right sizing, etc.). Interest rates are still very favorable, the economy is strong, unemployment rates are extremely low and housing options and inventory levels in our market are well balanced. A mentor from years ago once taught me that “we cannot control the market, but we can control what we do within it.” For those who plan accordingly and employ sound, sustainable strategies, 2018 should be a very productive year!
Now that we’re into the spring selling season, sales and inventory are both up from the previous month.
March closed sales were up 46.5% from February and down 13.9% from March 2017. March pended sales were also up from the previous month by 24.3% and down 11.6% from March 2017.
There were 1,337 new construction homes for sale in March, which is up 14.3 % from February and down 4% from last year.
The average sale price of a new construction home in March was $315,000, which is down $13,000 from last year at this time. The average price per square foot for the month of March was $187, which is the same as last year at this time.
The new construction market had 1,044 single-family homes for sale in the month of March, compared to 922 homes at this time last year. That’s an increase of 13.2% and works out to 7.7 months of inventory based on closed sales and 4.9 months of inventory based on pended sales.
For single-family homes, the average price in March was $319,000, which is down $25,000 from last year. The average price per square foot for the month of March was $187, compared to $191 per square foot last year at this time.
In the multi-family new construction market, 286 units were for sale in the month of March, compared to 234 homes in March of 2017. That’s an increase of 22.2% and works out to 9.5 months of inventory based on closed sales and 7.7 months of inventory based on pended sales.
The average sale price of a new construction multi-family unit was $287,000 in March, which is up $52,000 from last year. The average price per square foot for the month of March was $183, compared to $160 per square foot last year at this time.
The top new construction metro markets for single-family homes are: Ankeny, Waukee, Grimes, Urbandale, and Bondurant.
The top new construction metro markets for multi-family homes are: Waukee, Ankeny, Norwalk, West Des Moines, and Johnston.
As of the writing of this article, 30-year interest rates are hovering around the 4.5% range; however, they are likely to go up throughout 2018.
For more detailed information on New Construction Market data, contact me!