A client asked me if there were any new construction homes for them to see as we headed out today. I had to think about that one. Typically, I can run through a handful of homes being built throughout Wellesley, Weston, and the surrounding area--but this time, I couldn't think of one in their price range. The reason is that like every other buyer, builders are also having a hard time finding tear downs. We don't have readily available land without structures on it, so they are shopping for homes that can be demolished to make way for a new construction home. In a bidding war, builders can lose out too. They are giving it their best shot though, paying unheard of prices for the land.
That's not the only problem that builders are facing. Rising costs of materials and delays in getting them delivered is also hampering their progress. In addition, finding additional workers to help is a problem in construction because the demand is so high and many workers have been hesitant to return after continuing to receive generous unemployment benefits. Builders, plumbers, and electricians are so slammed that it's hard to schedule them on a timeline.
All of this has its toll on the consumers, too. If you have a new construction home under agreement, closing dates are frequently delayed. I know that first hand, and have seen dates being pushed out months at a time as builders wait for lumber and other critical materials to arrive on site. In turn, a consumer has to extend their rate with a bank to hold onto the property. Fortunately, home prices keep rising so they get that benefit of locking in a buying price early, but that equity only comes out if you are selling. It's certainly a frustrating situation all around.
I wanted to share a Wall Street Journal article that was recently published on rising home prices. According to the article, while builders are trying to increase production, it could take years to make a dent in the housing shortage. That same article also took a look at prices of homes overall in the country. "The S&P CoreLogic Case-Shiller National Home Price Index, which measures average home prices in major metropolitan areas across the nation, rose 13.2% in the year that ended in March, up from a 12% annual rate the prior month. March marked the highest annual rate of price growth since December 2005."
Now is of course a great time to take advantage of this sellers’ market if you’re considering listing. I must say though, I always find it so interesting that there are still houses on the market that have been sitting there for some time. At the end of the day, the market is still savvy enough to know when a property is overpriced. So remember, pricing well and not feeding into a greedy mindset is a wise idea. You will come out better in the end--trust me, I see it time and time again. Buyer's aren't so desperate that they'll spend a premium of more than 20% out of the gate. The market is as strong as ever...and in the end, the market is greater than us all.
I hope everyone has a safe and happy Memorial Day Weekend. I am off to Florida with my family this weekend, which is a beloved family tradition of ours. Since we had to cancel our plans last year, there is a lot of excitement in our house!
Until next week... :)