New Home Construction Sales Hit 20 Year Low
New home construction sales in Tallahassee are heading towards another record-low year if things continue like they started in the first half of 2011. Today we show four real estate graphs, two from the Tallahassee MLS and two from county tax records that paint a horrible picture for the new construction industry in Tallahassee. They show nothing but declining trends in an industry that has always been a consistent source of employment in Leon County and its surrounding areas.
The first real estate graph shows just how much new home construction sales have declined compared to existing home sales. While both are dropping significantly, it almost appears as if new home sales are coming to a near-stop.
The second graph shows the same information, but all sales are segmented by property type as well as new versus resales.
The next two graphs come from information recorded with the Leon County Property Appraiser’s office. When we look at Tallahassee's new home construction permits versus new home construction sales, the trends graph shows that we are still seeking a 20+ year low.
The final graph in our new home construction sales report shows that on average, new homes have comprised 22% of all sales over the past twenty years. Thus far in 2011, only 12% of all sales have come from the new construction side of the market.
Unfortunately, we expect to see the trend of very low new home construction sales continue, as the market works to absorb the glut of homes that are already available as well as the shadow inventory of homes that will be flooding into the market when the demand side stabilizes.
Opportunity In New Home Construction
If you have ever considered building a new home, it might be a great time for you to consider building now. I can think of three important reasons why building your dream home now could make a lot of sense.
- Low Interest Rates
- Lower Land Costs
- Home Builders Hungry For Business
Of course, existing home sales are still going to be less costly, but there may never be a better time to build based upon the convergence of the 3 points listed above. If you would like to discuss the process of building a new home, just drop me a note and let me know what you have in mind. We can help guide you through the process, and help you get very competitive bids from reliable and experienced home builders.