Jeremy Jenks: Good morning, good afternoon. Jeremy Jenks, Vice President of Sales here with the Trembley Group, and I am ready to share with you part two of our Market Common Market Update. If you remember from last week, we talked a little about the month’s supply of inventory and what it means being a ‘sellers’ market’ versus a ‘buyers’ market’.
Now, one of the most interesting facts to me – because I absolutely love – I’m kind of a nerd when it comes to new homes and new construction … But one of the things that I study is when you’re reselling a home helping somebody who, in others words, has bought a home, lived in it for a few years, that’s a resale in Market Common, there’s a lot of new construction. There’s a lot of competition with new construction right now. What you have to watch: the National Association of Realtors studies across the country, new homes will sell for about 10% more than a resale is their number, so let’s check out and see what Market Common is doing.
On resales we’ve got – make sure I got my sticky notes here – so, on resales what we’ve got price per square foot in 2016 was $129. In 2017, around the start of the year, it’s gone up to $133. Okay, so we’ve seen a little bit of an increase. It’s tracking up, but check this one out. Like all my bright-colored Post-It notes. New construction price per square foot, what we’re seeing there is $142 last year, to 2017, early 2017 we’re at $161. Huge increase.
Okay. Now, here’s the important part. If you just look at these two numbers, what does this mean to you if you’re going to sell your house. Look at the gap between the $133 and the $161 currently. That’s almost 20%. Why is that? Typically, somebody goes on site. They can choose their colors. They get a warranty. They can customize it so it fits with their furniture. There’s always going to be some sort of a premium that a buyer attaches to that new construction home in their mind. Costs have risen.
This market is a lot of retirees that want their dream home. New construction is just what’s driving the bus right now. Now, in Market Common area, the new construction homes should only be around for another three to five years, and then it’s going to stabilize as a resale market. Stay tuned for more updates on Market Common in the future.
For more information: Jeremy Jenks, Vice President of Sales, TheTrembleyGroup.com, 843.638.3002
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