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ed by MAARThe new construction market has made huge strides in cutting down on oversupply the last year. The inventory of newly built homes has dropped to 2,175, down 32.6 percent from the last year. Meanwhile—on the demand side—sales picked up during 2009 thanks to the federal tax credit for first time buyers. The combined effect is that the Months Supply of new construction inventory has fallen from 11.0 to 7.8 in the last year.
Does that mean its time for builders to start putting new projects in the ground, post haste? Not quite. The impending loss of the federal tax credit and a likely increase in mortgage rates down the road mean that downward pressure on home sales is on the horizon. Regardless, the new construction market is in a much better place than it was a year ago.
The biggest growth in new construction home sales can be found in the lower price ranges of single-family detached properties. Sales are up strongly in that segment over the last 12 months.
CHAD ELLIOT, REALTOR© The Hennepin Group, LLC Keller Williams Realty 17205 Yale Street NW, Suite D Elk River, Minnesota, 55330 | Mobile: (651) 795-1147 Fax: (763) 241-0187 Email: chadelliot@kw.com | |
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