A sudden increase in the sales of new homes: what to expect?

A sudden increase in the sales of new homes: what to expect?

It is not a secret that the pandemic that started in February has slowed down the real estate market greatly if not stopped it at all. Brokers could close only those deals that were already made and it was almost impossible to find new clients. However, the first conversations about quarantine weakening became the initial point for the restoration of sales and rentals. And the biggest surprise was made by a sudden increase in new home sales that happened in May already. Despite the fact that the numbers of homes sold did not reach the 12.7% received in the previous year, there was still a good step forward that can be an indicator of the real estate market revival.

What has changed?  

What has changed? 

According to the governmental report, the sales of newly constructed homes have increased in May significantly. There was a growth of 16.6% in comparison with April and the number of homes sold has reached 676,000. This number is even higher than the data predicted by professional polls and surveys.

It is worth remembering that the government might make late revisions in similar reports. The original number announced about April was 623,000, but later it was decreased to the figure of 580,000. The May report seems to be more realistic because more people have understood that pandemic is not an obstacle.

If to analyze the number of homes purchased by regions, the highest increase was in the Northeast - almost 50% of all properties. Western states could face an increase of 29%, while Southern states got 15.2% more new homeowners. The median price for a single-family house across the US is around $317,000.

If to compare this data with selling existing homes, the last ones could face only a drop in sales which is very disappointing. At the same time, this data can be so different because the reports are made at different stages of the property-buying process. The statistics about new homes is compiled on signing a contract with a building company, while the sales of existing property are considered completed when the deal is closed (it may take several months for that). It means that you can observe the latest tendency in new-home sales and the decrease in the sales of existing homes reflects the situation of March-April.

What does it mean for buyers and real estate agents?

What does it mean for buyers and real estate agents?

The difference of 1-2 months in providing information about sales of new and existing homes and the latest increase in the number of contracts signed say about the revival of the real estate market. Neither restrictions to move across the state nor possible job losses did not influence people’s purchasing possibilities drastically. It is clear that many potential buyers and sellers have taken a pause to see how the state economy will cope with the struggle and how this war reflects on it. The recent surge says that clients begin to come back to the market and do that quite actively.

The increase is good news for home builders as well. Many of them have experienced a shortage of material supply and a drop in sales, but now the situation is changing. What is more interesting, buyers’ preferences have also changed and now many people look for homes in rural areas further from the hustle and bustle of metropolitan areas.

 

Many experts say that a surge in new home sales should be followed by the growth of sales in the existing homes market (it may take up to a month to see the changes). But if these predictions do happen, it is possible to state that the real estate industry has come out of the decay and moves forward confidently.

Written by
Andrew Zlobin
CEO/Founder of spotlessagency.com

Related entries

When it comes to 3D modeling, virtual staging, and architectural rendering, we know that you want the details of how it works and how it can benefit you and your business. These recommended articles will give you the inside track on everything we do, and we’re sure you’ll find them to be as entertaining as they are informative.

image

Real Estate

Top 5 Home Selling Mistakes To Avoid In 2017

It happens that real estate may remain on the market for several years and there is hardly any client wishing at least to look at it let alone buy it. Why does it happen? Unfortunately, it may be the result of rough mistakes made by the seller. Today it is important to make up a strategy to sell a home for the reasonable money and within a short period of time. Some people ignore this not understanding that in 2017 it is not enough to make several amateur photos and set the price. That is why there is a list of sellers’ common mistakes to avoid and be more successful with selling homes

Read article Read article
image

Real Estate

Fancy cars for real estate agents: Yes or No?

It is not surprising to see successful real estate agents who drive luxurious cars. Moreover, since their job involves moving around the neighborhood, city, or even a state, the car seems to be a necessity rather than a luxury.

Read article Read article
image

Real Estate

How to attract the first real estate clients

Real estate agent profession is incredibly popular with Americans since sometimes commissions can be very high and it reflects on earnings as well. That is why there are over 2 million realtors in the US only and many people want to try this profession and achieve success in it. However, when you enter the market, you may face a real challenge – how to find the first clients.

Read article Read article
image

Real Estate

10 Cities for making a real estate career in 2019

Real estate business differs from one city to another. Every market has its own hot time, and if in one city, it can be easier to build your career in this industry, another city or town can be a real hell for new and even experienced real estate agents.

Read article Read article
image

Real Estate

6 Tips for realtor how to survive a holiday season

Real estate business has its peaks and lull. The holiday season is usually a difficult period for real estate agents since the number of deals, as well as buyers and sellers, decreases greatly. The reason for that is people’s desire to take a vacation, celebrate and just rest. It is also the time when realtors have time to take a break and gather all their strengths for the upcoming season.

Read article Read article
image

Real Estate

7 Things which differ top realtors from others

Real estate business is a tough competition where only 5% of real estate agents manage to get to the top. In fact, it is a goal of every newbie realtor to become once a top real estate agent and they’ll often start off by referring to colleagues as well as resources such as this InboundREM Real Estate Prospecting tutorial and similar guides. At the same time, top realtors behave and act in a different way from their colleagues. Having reached some success in this industry they change their strategies and start acting in a different way. What exactly changes? Look through 7 things top real estate agent do that others don’t.

Read article Read article
image

Real Estate

How to plan a vacation for real estate agent

It is not a rarity that real estate agents have no time for their rest. Any break in the activity may result in a smaller number of leads and a possibility to miss a good deal. That is why they prefer to work all year round and forget about holidays and vacations. If real estate agents who work in the companies have scheduled vacations, independent contractors and entrepreneurs should decide that themselves. Considering a vacation a real luxury they can devote time to it only when there is enough money but such a moment almost never comes. They usually postpone it for better times and they come very rarely. If you are one of those who cannot find time for a vacation but realize the importance of good rest, learn these 3 strategies and never neglect this time.

Read article Read article
image

Real Estate

10 Tips For a Real Estate Agent To Become a MILLIONARE!

The modern era provides many chances for people to become self-made millionaires in different professions. Real estate industry is not an exception. Agents get awesome commissions for their work so there are many possibilities that they can feel confident getting elderly and never hope only on pension. At the same time, it often happens that realtors who have been wealthy during their career turn out to have no savings behind their back and have to get used to living poorly. If you are a real estate agent who wants to have a careless life in the elderly age, consider these simple tips while you are young.

Read article Read article
image

Real Estate

25 Shocking facts every real estate agent should know

Statistics is a science which plays a very significant role in many industries and real estate business in particular. Realtors should always keep up with the trends and stay up to date to confirm their professionalism and awareness of the industry in the eyes of clients. Real estate business is highly competitive so it is very important to be informed about the latest statistics and use this information working with clients and getting more leads. We have prepared real estate agents 25 examples of overwhelming statistics connected with real estate business.

Read article Read article
image

Real Estate

Getting The go-to Agent in The Neighborhood

It is not a secret that real estate agents serve a certain area. It can be a city, town, or a neighborhood and a realtor must be an expert in this area to become successful. One of the most important tasks for real estate agents is to generate leads in the area they serve and real estate farming can be a perfect approach to achieve this goal. This article will tell you about the basics of real estate farming and how to become a leader in the neighborhood you work in thanks to that.

Read article Read article

If you have any questions we will happy hearing from you

Address

610 West Broadway, Suite 201

Jackson WY, 83001