New Construction on the Market

The housing market continued to grow slowly but steadily through the end of 2014. New construction numbers also improved. Nationally, single-family housing starts in December were at 728,000, a 7.2 percent increase above November, when housing starts stood at 679,000, according to the U.S. Department of Housing and Urban Development. All privately owned housing units were at 1,032,000 in December, representing a slight drop from the 1,053,000 recorded in November but a 1 percent increase over December 2013. In addition, according to Chicago Agent’s recent Truth About Agents issue, 54 percent of agents’ clients were interested in new construction in 2014, compared to just 28 percent in 2013.

John Carroll, division president at Ryland Homes, expects a strong spring. His company already has a number of projects underway for this year, and has fielded many calls from potential homebuyers about a perceived inventory shortage. He believes that while there are homes available on the market, the quality of the available resales is not very high. Instead of shopping around and looking at what’s available, they opt to make choices about floor plans and fixtures with the knowledge that they can get it brand new and relatively quickly.

“Because a lot of the inventory that is out there is not the greatest, people are gravitating toward new construction,” Carroll said. “People are coming out and they’re at a point where they’ve figured out they can get a mortgage, they have good credit and for whatever reason they have a need to do something different. They’ve had a child, they’re divorced – whatever their life events are, they’re looking for another home.”