The April 2021 market report from the National Association of REALTORS had a seeming contradiction. It was the third month in a row that existing home sales declined, yet home prices hit an all-time high of $329,100.
Typically, when home sales fall, prices dip as well, signaling a developing softness in the market. But thanks to a perfect storm of circumstances, buyer demand is stronger than ever, despite rising mortgage rates and less affordability. Housing supply is down over 28% with the unsold inventory at a two-month supply, down from a 3.3-month supply from the previous year. Properties lasted 18 days on the market, from 29 days the year before, and 83% of homes sold in less than a month.
According to the National Association of Home Builders, the new home building also fell in April. Many ports closed, hampering the transportation of materials. Lumber, steel, resin (PVC) and other shortages have driven construction costs up by 12 percent year-over-year, causing many builders to pause building projects.
Yet, it’s a good time to build your luxury dream home. You may pay more to build this year, but the conditions that are hampering the market will result in higher value for your property. Forbes.com quotes real estate experts who say that home prices will continue to rise. Also, if you build now, you can include features that will appeal strongly to the post-pandemic buyer of the future, such as expanded outdoor areas, office spaces and smart home/touchless technology and air filtrations systems, suggests ThePinnacleList.com.
Article Courtesy of Talking Real Estate BHHS