The latest updates on new builds
Since shortly after the pandemic hit, the Fairfax County housing market has been on fire. And that includes new builds. In this article, we will give you the most up-to-date information on the new-build market.
Last month the U.S. Census Bureau and the U.S. Department of Housing and Urban Development released their most recent data on new home sales.
According to estimates by both departments, the report showed sales on new builds in September 2021 were at a seasonally adjusted annual rate of 800,000, which is 14% above the August rate of 702,000, but still 17.6% below September of 2020. New build sales are trending up, and we are hoping they continue to rise.
The Effect Seen in Fairfax County New Builds
While Fairfax County buyers hunger for new construction homes, they still have fewer options than pre-COVID-19.
Lumber is Still Expensive
A considerable part of the problem with new builds was prompted by the pandemic, which shut down production of all materials needed from lumber to concrete and semiconductors. Add in the growing number of millennials, who are big on new builds, recently surging the housing market due to historically low-interest rates, and we have an issue.
The cost of lumber has had a considerable effect on the current new-build housing market. Lumber prices are up 40% ($545), which is significantly less than its peak of $1,515 per thousand board in May of this year. Before the pandemic, the price of lumber was between $350 and $500. And, although prices are considerably less than they have been, experts predict they will rise back closer to $700 soon.
Why Lumber Prices Are Rising Again
Although the lumber bubble was popped, once prices got up to near 300% above pre-pandemic levels, buyers stopped buying and didn’t come back until they saw prices were not climbing back up. With that repressed demand back into the market, prices were driven up once again.
Industry insiders don’t anticipate lumber prices to skyrocket but they believe higher prices could continue into next year.
Acquiring New Land
Builders must acquire land to build on. This means Northern Virginia’s red hot housing market has builders competing for the teardown of old homes to acquire land to develop.
Shortage of Skilled Labor
Construction firms are wrestling to find qualified workers. On September 22, 2021, the U.S. Chamber of Commerce released its quarterly construction report showing that over 90% of contractors have difficulty finding skilled workers nationwide.
Options for Fairfax County New Construction Homes
Fairfax County new construction home builders like Toll Brothers and NVHomes have many new quick move-in homes, giving home buyers a brand-new home without the long wait of building from the bottom up.
For Fairfax buyers looking to design and build their custom homes, be prepared for a bit of a delay due to supplies, material shipments, and job shortages nationwide.
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