The New Construction Market Sees Robust Gains!
The 2015 New Construction Market closed with robust year-over-year gains. Unit sales were up 16% over 2014 and Sales Dollar Volume was up 22% over 2014. The overall market had a total 1,883 units closed, with 328 of those being multi-family units and 1,555 single-family units.
The top five single-family areas for 2015 were Ankeny, Waukee, Grimes, Urbandale, and West Des Moines. The top five multi-family areas were Ankeny, West Des Moines, Norwalk, Johnston, and coming in tied for fifth were Urbandale and Waukee.
The 2016 New Construction Market is off to a healthy start and benefiting from stable rates, adequate inventory levels and mild weather conditions.
In January, closed sales were up 11.8% and pending sales were also up 5.1% over January of 2015.
The average sale price of a new construction home in January was $324,000, which is up $18,000 from last year! The average price per square foot for the month of January was $177, compared to $175 to last year at this time.
The overall market had 847 single-family homes for sale in the month of January, which is up 0.5% compared to last month and up 10% compared to last year at this time.
The number of single-family homes closed in the month of January was 89 units, which is down 39.5% compared to the last month and up 17.1% compared to one year ago.
121 single-family units went pending in the month of January, which is up 65.8% compared to last month and up 4.3% compared to last year.
The overall multi-family market had 222 units for sale in the month of January, which is up 12.1% compared to the last month and up 15% compared to one year ago.
Multi-family homes had 15 closed units in January, which is down 28.6% compared to last month and down 11.8% compared to last year.
24 units went pending in January, which is down 4% compared to the last month and up 9.1% compared to last year!
2016 has been off to a great start and the market continues to remain strong; however, the market is a bit congested at certain price points. This is due to, but not limited to, land prices, development costs (i.e. regulation), labor shortage, labor costs and material costs. Homes ranging in the mid-market price range ($270,000–$400,000) are making up a disproportionate percentage of the total sales. Our industry faces, and must overcome, the aforementioned obstacles if we’re to expand the product offering and price points, which will enable us to supply the millennials with affordable new homes, as well as association homes for the baby boomer generation.
Interest rates have held fairly constant at, or just below, the 4% mark and all indicators point to a growing New Construction Market in 2016.
For more detailed information on New Construction Market data, please feel free to contact me!