Monday, 01 June 2020

Are Coronavirus Fears Spurring a New Construction Frenzy?

Written by Jaymi Naciri Posted On Tuesday, 05 May 2020 05:00

The idea of a brand-new home that no one has ever lived in and that reflects your choices and needs has always sounded pretty appealing, right? But now that we’re fighting a worldwide pandemic, this option seems to be growing on many a homebuyer. 

“In the initial four weeks of the national shutdown, sales of newly built homes began falling precipitously, down 85% from normal spring activity by the fourth week,” said CNBC. “In the past two weeks, however, the numbers have started to climb, according to John Burns Real Estate Consulting, which tracks hundreds of builders nationwide.”

Interestingly, that growing demand for new construction is being driven by “a wave of renters…leaving their apartments and eyeing new homes, Devyn Bachman, manager of research at JBRC, told them. “In her research, Bachman found demand for new construction heavily skewed toward renters, especially young couples with two incomes who feel secure in their employment.”

The push for new construction is largely location-motivated; many of these renters who currently live in cramped confines in packed urban areas are, perhaps not surprisingly, seeking more space in the suburbs—right in the new construction sweet spot. They’re also looking homes that are already being built or standing inventory that they can move into quickly.  

Mid-Atlantic Builders, a builder in Maryland and Northern Virginia, just sold three spec homes, with plans to build more for buyers who “would rather just walk through a new home and buy it,” Stephen Paul, the company’s executive vice president, told them.

But vacant homes are not just limited to new construction. Many resale buyers are specifically focusing on homes that are not currently occupied. 

“Vacant homes are still being listed and shown, according to realtor Lyssa Seward, president of the Seward Group at TTR Sotheby’s International in Washington D.C. and Alexandria, VA. Brittanie DeChino, vice president of the Seward Group, told CITYLAB that, “In D.C., the supply of vacant homes for sale could carry the market.”

Team Diva Real Estate at Coldwell Banker Bain in Seattle has gone so far as to limit their listings to vacant homes. “We’re not listing any homes that someone is living in,” said Managing broker Kim V. Colaprete. “I’ve been very hardcore about if you are living in a home it’s really not safe for you to do that.”

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