Comparing New Construction in Popular Cities

Posted On Wednesday, 24 February 2021 21:57

No matter where you look, the real estate market never stays the same for a long time. You will see plenty of changes in various areas for all sorts of reasons. Therefore, giving the exact figures for a new real estate construction project is nearly impossible. 

However, you can go over estimate figures based on various regions. Once you familiarize yourself with the basic estimates, you can read about the factors that can influence changes in the prices. But, keep in mind, there is such a thing as good and bad cities for first-time homebuyers. 

New Construction Costs

Since houses vary in size, it would be best to look at the per square foot costs. 

The per square foot cost of building a home can significantly vary based on certain factors as well. The reason is that not every house is essentially made the same, and your builders may differ as well.

Your builder may add the cost of landscaping. Sometimes, the completed areas are fully priced while the parts like garages and basements are partially charged. Also, the outdoors are generally charged a quarter of the total cost. 

Therefore, the total price per square foot can significantly vary. Other than the above factors, the ground's surface and what's underneath it can cause a change in the construction costs as well. 

The average cost in the Midwest for building a home is $140 per square foot. In the West, it is $165 per square foot. The South and Northeast are $130 and $180 respectively. 

If you're talking about entirely constructed homes, the average is $190,000 for a single bedroom house. For a two-bedroom, it can be $300,000; for a three-bedroom, it can spring up to $415,000, and for a four-bedroom, the average is $550,000. 

However, you should remember that there can be massive fluctuations. Taking the Nashville real estate market, for example. The average prices of new homes have increased by up to 27%. 

Factors Affecting the Real Estate Market

Demographics

A particular population's demographics describe its race, gender, age, population growth, and income, among other things. 

While they are sometimes ignored, the demographics can have significant effects on the real estate market. If there are some massive changes in the demographics, they can last for a long time. 

Take baby boomers, for instance. Everyone around the world who knows anything is talking about how their retirement is changing everything. Not only that, but the changes will be noticeable for years to come. 

The Economy

The real estate market is vastly dependent on the economy as well. Generally speaking, if the economy is not doing so well, the real estate market may also struggle. 

Also, some properties can be affected more than others when it comes to changes in the economy. For instance, a hotel may be more sensitive to economic fluctuations than an office building. 

Interest Rates

The market prices are also highly affected by the interest rates. Therefore, you must seriously check how the local lenders are doing in the area before looking into properties. 

The problem is, changes in the interest rates can cause a strain or be beneficial for an individual. If the rates are too high, lesser people will look into buying houses because mortgages may become impossible to handle. If the rates are lower, more people may be looking to purchase homes. 

Considering all of these factors are favorable in the region, you may be hit with something else: high demand. When the aspects are favorable, everyone would want to build houses. Therefore, the prices may see a rise yet again. 

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