Questions?Get Fast Answersarrow

Blog

Is the market up? Is it down? How do I make heads or tails?

Categories: Uncategorized | Posted: January 18, 2012

Good question. It all depends on what set of numbers you look at. New construction sales are down 11% in Richmond and Columbia counties since 2004. However, if you drill down further you’ll see that Columbia County new home sales are actually up 8% over that same period of time.

So Columbia County is booming right? Not exactly, sales of existing homes is down 30% in the two counties, with Columbia County down 33%.

Huh? How can that be. This is where it gets interesting:
1. The price of materials and labor decreased with the housing recession. This enabled home builders to bring their pricing down. This gave new homes a competitive advantage over used homes.
2. We’ve had our share of foreclosures and short sales, but not as dramatic as other parts of the country. Helping to keep pricing high enough for new construction to still make sense.
3. Fort Gordon and the medical community stabilized our employment base. While our unemployment rate is higher than we’d like, we saw some jobs come into our area.

So will this trend continue? To me it looks like resales are getting more competitive with new construction on pricing. We’re seeing some increases in new construction costs.  If this trend continues, we’re likely at a floor for new construction pricing.  While this could slow the growth of new construction if resales pick up a higher percentage of total sales, I think it could help as well. Most of us know someone that would like to move up, or down, but have to sale their home first. An increase in the overall turnover in the market should be good for everyone.

I hope that sales for new construction are just as strong in 2012 and that the resale market starts to gain some momentum.

*Market numbers provided by Blanchard & Calhoun

Caroline Ashe

Comments are closed.