May 25, 2021
If you have become frustrated trying to find a new home in this crazy 2021 real estate market, you are not alone. A number of factors have combined to create the “perfect storm” seller’s market leaving homebuyers scrambling to submit bids on the shrinking available inventory of homes for sale. Many homes are selling well above asking price as homebuyers compete to buy a new home while interest rates remain at historic lows.
A recent Business Insider article about why Goldman Sachs says the housing shortage will last for years mentioned, “… millennial homeownership is causing the US to run out of houses, with millennial demand intensifying the starter-home shortage that existed even before the pandemic due to factors including rising construction costs, restrictive zoning rules, and real-estate investors snapping up starter homes in hopes of making a profit.”
While the current housing market frenzy may seem eerily similar to the pre-2008 market crash, there are some important differences that should prevent a similar outcome.
The housing bubble that caused the Great Recession was based on easy credit that allowed homebuyers to purchase homes with nothing down and speculate on real estate with little to no skin in the game. With no way to sell the homes for the value of the mortgage when the bubble burst and home prices plummeted, having little-to-no equity in their homes made it easy to walk away from their mortgages.
Today’s market is completely different in that regard. While the historically low interest rates make it easier to buy a home, homebuyers are still required to have a down payment and the rising costs of homes are based on real factors such as land and material costs, remote and relocation workers, and millennials entering the housing market.
With less than two months’ supply of available homes on the market, many homebuyers are looking at new construction as an alternative to pre-owned homes. Homebuilders are constantly developing new communities and homesites, and putting new homes on the market, adding to the available inventory of homes.
However, the homebuilding industry has been hit hard with rising material and land costs, especially in the last year. According to the NAHB, “Lumber prices have skyrocketed more than 300% since April 2020, causing the average price of a new single-family home to increase by nearly $36,000.”
Between the unpredictable price of materials and land coupled with supply-chain issues caused by the pandemic, many homebuilders are taking homes off the market, or not listing them until their homes are far enough along that the builder’s cost can be accurately assessed. This has led to even more homebuyer frustration with buyers scrambling to find new homes in the areas they want to live.
To help meet the increasing demand for new homes and help their buyers meet their closing date, many homebuilders are temporarily changing how they do business. Homes and homesites in new communities are under limited-release restrictions as builders can’t accurately predict how much the homes will cost them to build a few months down the road.
The new construction norm of homebuyers being able to pick a homesite and floorplan with options and upgrades are being put on hold in many markets as homebuilders are dealing with backorders in almost every area as well as the skyrocketing price of lumber.
To solve some of these common issues, McKee Homes is starting to choose specific floorplans, options and upgrades for each available homesite in most of our new and upcoming communities and phases. That way the materials can be ordered far enough in advance to get the home completed without major delays. This allows our homebuyers to feel confident they can close and move into their new homes according to the preset dates and schedules set when the contract is signed.
We look forward to reopening our design studios for selections as soon as material costs and supply-chain issues have normalized.
Is it possible to find a new home for a reasonable price in today’s housing market?
McKee Homes has quick move-in home inventory in select communities in their Raleigh, Wilmington, Pinehurst and Fayetteville area markets. With new communities and phases in existing communities opening soon, we are doing our best to help our homebuyers find the home of their dreams in this crazy housing market.
Our award-winning designs are built with quality in mind and backed by our 2-10 homeowner’s warranty. Our warranty includes 10 YEARS of structural warranty, 2 YEARS of distribution systems such as electrical, HVAC and plumbing, and 1 YEAR workmanship and materials defects.
Once you find a new home, are you prepared to act quickly to secure it?
In the current real estate market, being able to quickly get prequalified and know you can obtain a mortgage by a certain date can be the difference between owning a new home or missing out on the home of your dreams.
It’s also crucial to know you are getting the best deal possible and are working with a mortgage company that can deliver the best rate and keeps the process moving so you can close on time.
Vision Lending Services was created to do all that and more for McKee Homes’ homebuyers. The Vision Lending team is available seven days a week and makes sure that every step of the home buying process is simple, easy to understand and as transparent as possible.
For more information about McKee Homes’ preferred lender, communities, floorplans and quick move-in homes in Eastern North Carolina, please contact us at 910-672-7296, use the form below or use our Contact Us web page.