Should you follow me on Twitter or Facebook, you likely already saw a posting on the strength of builder confidence at the present.
Builder Confidence is essential to ensure a growing and improving real estate market in Chesapeake. This is really a true statement throughout the U.S. When a business person is willing to invest, the perception is that a fair profit can be had.
Obviously, any builder is a business person that desires to make money as he builds homes. Thus, his/her confidence is a strong indicator that the builder perceives if they buy land and plan to build in the next 1 to 2 years that the homes will sell.
This long perspective is required as city approvals, financing for the project and such can easily take 1 to 2 years in Chesapeake or anywhere in the country. Legitimately, Chesapeake City Council, Planning Dept. and other city stakeholders must review the builders plan to ensure the feasiability as to:
- Homes built will fit into current housing plan/land use plan at any given location
- Builder’s financing is in order
- Builder’s home plans meet current codes
- School Population as elementary, middle and high school
- Infrastructure improvements
- Suitability and acceptability to surrounding neighbors
And these are just a few of the key hurdles for a builder/developer to jump before he/she can turn over the first piece of dirt.
Thus, the long time line to start a project and the strong builder confidence notes is a strong indicator that the improving real estate market will continue to improve. And continue to improve.
Home Owners need to take a page out the builder/business person’s playbook. If they are confident the market will continue strong for the next two years, any Home Owner desiring to move in the same two year period should get the house ready and call me.
The buyers are still waiting for those home sellers. The builder won’t be ready for two years!!
In many areas of the country, there are not enough homes for sale to satisfy the number of buyers looking to purchase their dream homes. Experts have long proposed that a ramp-up in new, single-family home construction would be one of the many ways to overcome this inventory shortage.
According to a recent survey conducted by the National Association of Home Builders (NAHB) andWells Fargo, housing market confidence amongst builders reached an 11-year high last month.
What Does High Confidence Mean for the Housing Market?
In a recent interview, Rob Dietz, Chief Economist and SVP for NAHB, put it this way:
“Higher market confidence will translate into more building and more inventory in 2017. We expect single-family construction to grow 10 percent next year.”
With 2016 marking the best year in real estate sales in over a decade, a 10 percent ramp-up in single-family construction will only aid in making 2017 an even greater year.
According to the latest US Census data, sales of newly constructed homes were up 3.7% over January 2016 as they reached a seasonally adjusted annual rate of 555,000. Dietz went on to comment:
“We can expect further growth in new home sales throughout the year, spurred on by employment gains and a rise in household formations. As the supply of existing homes remains tight, more consumers will turn to new construction.”
With the weather and the real estate market heating up this spring, there will be a surge of new construction coming to the market soon.
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