If you plan to buy of new construction in North Georgia sometime in 2012, don’t expect today’s low prices. Like everything in housing of late, the market for newly-built homes appears to be stabilizing and, in some markets, improving.
As foreshadowed by this month’s strong Homebuilder Confidence survey, the Census Bureau reports that the number of new homes sold rose to a 6-month high in October, climbing to 307,000 units on a seasonally-adjusted, annualized basis.
A “new home” is a home that is considered new construction. It’s the opposite of an “existing home”.
Home buyers are comparing new construction to home resales and liking what they see. At the current sales pace, the nation’s complete new home inventory would now be depleted in just 6.3 months. This marks the lowest home supply since April 2010 — the last month of the last year’s federal homebuyer tax credit.
Here in the North Georgia Mountain Real Estate Market however, the picture is much different. Below is a break down of each county we serve and how the “new home” sales are stacking up. This data was taken from the Northeast Georgia Board of Realtors® MLS. You will see below the the number of new homes being sold in each county since June 1st of this year. The numbers are very low due mostly in part to the number of Foreclosures For Sale that continue to somewhat dominate the market.
- Fannin County – 24 New Homes of 237 Homes Sold or 10% of the Market
- Gilmer County – 7 New Homes of 222 Homes Sold or 3% of the Market.
- Towns County – 6 New Homes of 83 Homes Sold or 7% of the Market.
- Union County – 13 New Homes of 221 Sold or 6% of the Market.
Of the 1,921 Homes currently For Sale in these 4 counties, only 99 are New Construction. That is only 5% of the market share.
By building only to meet new demand, builders are keeping home supplies in check, and home prices stable. They’ve also found a niche market — 80% of homes sold last month sold for less than $300,000.
Split by region, the Census Bureau reports October’s New Home Sales as follows :
- Northeast Region : +0.0% from September 2011
- Midwest Region : +22.2% from September 2011
- South Region : -9.5% from September 2011
- West Region : -14.9% from September 2011
Unfortunately, the data may be incorrect.
Although the October New Home Sales report says that sales climbed 1.3 percent last month, the government’s data was published with a ±19.7% margin of error. This means that the actual New Home Sales reading may have been as high as +21.0 percent, or as low as -18.4 percent. Because the range of values includes both positive and negative values, the Census Bureau assigned its October data “zero confidence”.
As home buyers, then, we can’t take our market cues from the published data. Instead, we should look to other metrics including Housing Starts data and the aforementioned homebuilder confidence survey. Each points to strength in the new home market, and foretells higher home prices in 2012.
If you’re in the market for new construction, consider writing an offer soon. Home prices remain low and mortgage rates do, too — a combination that keeps home payments low. Next year, that may not be the case.