It is often difficult to predict exactly what is going to happen with the housing market. Sales bounce up and down for a variety of reasons. In fact, sales of new homes surged to their highest level in the last nine years this past July. Then in August, sales began to retreat on a nationwide level. The only exception is in the western United States. There are many reasons why this is happening, but real estate agents are optimistic about the future of new home sales.
The Jump: Newly Built Houses Boom in the West
In the span of one month, newly built home sales jumped up 8% on the West Coast. Oddly enough, nationwide sales dropped by 7.6%. Then, in July, there was another boost in sales, boasting a jump of 13.8% nationwide. This is the fastest that home sales have grown since 2007.
While the western portion of the country was the only segment that saw an increase in sales, drops in sales varied from region to region. In the Northeast, this drop was 34.3%. In the South, it was 12.3%, and in the Midwest new home sales dropped by just 2.4%.
In August of this year, the median price of new homes was $284,000 across the nation. This was down 5.3% from August of 2015. This drop was not unexpected, especially after July’s sales surged.
The Future of New Home Sales
Real estate professionals are optimistic about the future of new home sales, even with this drastic loss. Sales may not be back to their “normal” levels, but economists believe that there will be an upswing soon. Real estate agents and brokers must adapt to new and ongoing changes.
One of the biggest reasons why this is happening is that younger buyers are not purchasing homes as quickly as generations past. It could be that younger buyers are buying older homes rather than brand new options, and it could be an issue of affordability.
Another problem is the lack of inventory, especially inventory within the proper price range meeting a new buyer’s specifications. As inventory (and construction) increases, so may the sale of new homes.
It is the responsibility of every real estate agent to pay close attention to local trends in addition to regional and national trends. Continuing education can help you stay on top of trends and technology. Contact us for more information about continuing education for real estate professionals.