ONWARD & UPWARD
Most key housing statistics are showing notable increases: Prices, interest rates, and newly listed homes are all up year over year.
The median sales price in California is $818,000, a 10% increase over last year. Still, time on market is down, so even with higher prices, inventory is moving. Paired with a decrease in total all-cash sales in the first quarter of this year, I think this indicates that consumers are beginning to accept higher interest rates and are ready to buy.
BIDDING WARS
Builders and developers are still scrapping for land, and buyers are battling it out for quality listings.
In the first quarter of 2024, almost half all homes sold in California went above list price. This is another positive indicator that the market is willing to bear some of the increased rate and price pressures. Hopefully raw land and finished lots will show similar activity as long as financing comes through – and holds.
SUPPLYING DEMAND
New home construction has plenty of runway.
We continue to lag behind healthy market production numbers, and with only 2 months supply in the market on average, builders and developers are in a good position to continue bringing new homes and communities online.
DESIGN DIFFERENTIATORS
New home designs can outperform used homes.
New construction offers higher efficiency, better technology and enhanced livability. Consumers are asking for more, better work from home spaces, large pantries and multigenerational living, and these are hard to find in aging stock. Exceptional indoor/outdoor entertainment space can be a game changer that will help new home developments rise above established neighborhoods.
