New home construction is looking up

Today, in real estate, we are suffering from a massive shortage in inventory. It’s not that there is a shortage of homes, just a shortage of people looking to sell them. This makes that market rough for first time buyers, but not everyone suffers from this — homebuilders are optimistic about the prospect of this market.

West Chester is booming with new construction homes being built on the outskirts, offering the great schools, with some added privacy. This boom is a good sign, and it offers the midlevel buyers a great opportunity.

When you look at the market, you’ll notice that there is a lot of high prices. This is the natural reaction to any market when buyers are competing for the same house. Competition drives prices up, and right now prices are up. But that means that all these buyers competing for older homes find themselves in the new construction price range. This is why we’ve seen the homebuilder index jump up in the month of May.

The homebuilder index just measures the confidence they have in the market and their ability to start new projects. While it’s been strong since March, it just keeps rising and took a 2-point jump for May — not a bad place to be. When builders are confident, new construction buyers can expect to get a good deal.

When times are tough, builders are more likely to fight tooth and nail to make sure to get every penny out of the home they’re looking to sell. However, with the boost in confidence, buyers know that the builders are looking to sell out this project and move onto their next one. That means that the homes are competitively priced, and they are looking to move the inventory.

Single family new construction accounts for the largest portion of new construction, and they are still on the rise, but ever so slightly. The rest of the new construction market has seen a dip in permits request and granted. This indicates a slow for the building of townhomes and condos. But the neighborhood is still on the rise.

This looks to be the con-

tinuing shift in the new construction market. Whereas, during the economic woes of the recession, they were trying to stay afloat with cheaper builds, the builders are now building larger homes

and communities. This is part of the builder confidence.

While the market is not in a great place for those looking to get into it, it is a great time for those looking to move up into a new home. People looking to move and upgrade their home can expect to sell their home for a premium and get into new construction

for a lower price.

The same goes for those who are looking to downsize. Many builders see the inflated market and are looking to build right in the price range to steal some of these buyers over the to the new construction side. That means that they’re trying to keep the prices in the mid-high range. For those looking

to downsize, these homes will not be the massive 4,000-6,000 square foot homes of 2008. Instead, you can expect to see homes around 3,000 square feet.

If you’re thinking about new construction and you’ve got a home to sell, then this is the perfect time for you to make the move — strike while this

iron is hot. When you are moving into new construction, make sure that you push incentives. Maybe the builder has a real estate team and they can get you the best deal possible. If you act quickly, you can be sure to get a fantastic deal.

Wayne Megill is the principal of The Wayne Megill Real Estate Team of Keller Williams Brandywine Valley and the President of Megill Homes Inc. For buyer or seller representation, or for more perspective on the local and national real estate market, please email Wayne@waynemegillteam. com and visit The Wayne Megill Team site at www. pahomesandrealestate.com

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