2013 New Construction Update: Strong & Steady

by Megan Oster

Cover_TOCNew construction sales are fast on the rise in the U.S., outpacing sales of existing homes. While sales of previously owned homes rose 9.1 percent, new construction home sales jumped 28.9 percent in January, the highest annual sales pace in four years, according to data released recently by the Commerce Department.

That data should be no surprise, considering that the department also reported in January that building permits in December 2012 increased at a seasonally adjusted annual rate of 903,000. Housing starts in December 2012 were at a seasonally adjusted annual rate of 954,000. In addition, young adults are now reentering the market, according to the Census Bureau. Annual household formations are nearing the boom years’ formation numbers, which were 1,250,000; during the recession, the annual formations were about 650,000, and in 2012, they were back up to 1,150,000. Freddie Mac is predicting that new household formations for this year will be 1,250,000.

“Resale listings have fallen below historic norms, and there has been an increase in new construction permits. In 2012, new home starts were up nearly 32 percent from 2011, and the demand for new construction is expected to increase this year as well,” says Todd Condon, vice president of sales for Ryland Homes. “While the market has yet to make a complete recovery, the momentum is quickly growing in favor of new construction, and we are excited about continued growth this year.”

What could also be responsible for this surge in new construction demand is that within the past two years, more and more homebuilders have kicked their special financing incentives up a notch – some offer to pay closing costs and arrange home loans through in-house mortgage operations, for example, and some take advantage of government-backed mortgage programs that allow buyers to get a home with little or no down payment. With incentives like these and housing inventory currently at an all-time low, it has actually become easier to buy a new construction home – and even customize it with finishes and appliances to a buyer’s liking! – than to buy an existing one.

Here are a few spring new construction properties in detail; click here to see our New Construction Status Update, which has all the new construction properties available across Chicagoland.

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