In short – there’s lots of new construction in Charlottesville and Albemarle.
It’s been said that 2013 is the year of the return of the spec house; we’re seeing more new construction than we’ve seen in years. Buyers have more options, sellers have more competition.
Four important and relevant stories before we get started:
– Why take a Buyerâ€™s Agent to new construction?
– Buying new construction without a Realtor? Read this first! (note: this builder is now no longer doing business in Charlottesville, but we have two national (and maybe a third on its way) builders now and many builders use their own contracts – caveat emptor – or: hire competent buyer representation!)
– Charlottesville â€“ A Healthy Housing Market (for New Construction) â€“ With some Context
The evolution of the new construction market in Charlottesville* has been one where there were once dozens of homebuilders and now there are a handful. And that handful are building. A lot.
The ramifications of all of this construction are many. A few to start:
– Increased competition for existing homes
– Denuding of the landscape
– More choice for homebuyers
– The opportunity for homebuilders to differentiate themselves is more challenging than ever â€¦ if everyone offers granite and everyone offers hardiplank and everyone offers an open floor plan â€¦
– Those seeking to purchase homes now with resale in mind (that should be all of you) need to keep at least two things in mind:
1) The siting of the house matters (location, location, location)
2) You’re likely to be competing against new construction for quite some time.
– Some of the neighborhoods on the map have 5-10 homes to be built (Evangeline for example), some have 10-50 (Dunlora Forest) and some have 100+ (Old Trail)
View New construction in Charlottesville in a larger map
Real estate is local – and I’m thinking that our area may be leading the charge in a return to new construction.
Mike Simonsen from Altos Research writes (read the whole post – he describes a lot of important topics and segments of the real estate recovery):
Since 2007, new housing starts have been anemic. The long-term average construction rates are about 1.5MM homes per year. In the last six years, weâ€™ve averaged well under 1MM. And since 2009, the average is closer to 500,000. Meanwhile population and household formation keeps on trucking. The over-construction that happened in the bubble is a distant memory. See the chart to the right. Construction volume under the orange line are â€œundersuppliedâ€ conditions. The homebuilders imploded so profoundly after the bubble, that we havenâ€™t had this few new homes being built since 1959.