Low Housing Inventory Drives Up New Construction Prices

When housing inventory is low, buyers feel a lot of pressure and frustration. Finding the right home for their family can be difficult.  So, even though they may not have considered new construction in a more 'normal' market, many more buyers are now looking at a newly-constructed or nearly-completed home as their best choice.

The reality is that if you need a home because yours is sold, or you are new to the area, you need to pick from the current available inventory of homes for sale.

This situation is driving up the prices of new and existing homes, and is also creating an uptick in sales for new home builders.

There are currently over 250 listings in Monmouth County for newly-constructed, soon-to-be-constructed, or otherwise 'available' opportunities to build a new home.  Here is how they break down:

  • 20 under $300,00
  • 80 between $300,000-$600,000
  • 60 between $600,000-$900,000
  • 45 between $900,000 - $1,500,000
  • 35 Over $1,500,000 (to tp $10 million)

See the Monmouth County new-construction home listings here.

Monmouth County is much like many other parts of the country in that while the sales numbers in February showed nice percentage gains, the housing market still needs more new construction. Given the demand, housing starts are at about half of where they should be.  Why?  Largely because the small builders, who are the backbone of the market, are still suffering from the inability to get the financing they need.  The larger builders with more resources are focusing on higher-end homes because that's where they see demand and a higher profit margin.

In 2015 this situation should start to even out as new community projects get approved and funded, and more home owners are in a position to sell their home and buy a new one.

Read about the national picture on CNBC - Here's the backstory on the big bounce in new home sales