New Construction Home Sales in the New Bern Market
So, how is new home construction faring in Craven County? If you listen to the national media things are looking rosy for new home sales, and I am sure they are in certain areas of the country. However, in Craven County new home sales are still lagging as demonstrated in the numbers below. Take a look, and then we will try to analyse why this might be the case.
New Home Sales through 10-2.
2013=141
2012=184
2011=179
2010=232
2009=235
2008=269
2007=423
2006=526
2005=491
2004=160
Last week the news reported Fannie Mae officials were saying the recent increase in mortgage rates held new construction home sales back last month. In my opinion this is not the real underlying reason. It is the weak economy, lack of real jobs, and that new home prices have continued to rise while existing home prices have fallen. This has made existing homes more attractive to most buyers.
Last month, my wife Jana, ran an ad on Craig's List for a Real Estate assistant to help us process paperwork. We had one MBA, and at least 8 recent college grads apply for a job that starts at $24,000. While we are delighted to get such quality applicants, I don't think an MBA will find this a rewarding career. My point, it is still a tough job market in this area and throughout most of the country.
Of the new homes sold this year only 4 have sold for over $250,000. What does this say? Many if not most of the new home sales were to young Marines that are in the $150,000-$200,000 price range. Marine officers that use to buy in the $250,000-$300,000 are opting to rent now instead of buying. The protracted weak economy has caused many folks that have good jobs to stay where they are for fear of losing their jobs.
Also, many of the retires relocating to this area are looking in the $200,000-$250,000 price range whereas they use to be looking in the $250,000-$350,000. They can find an existing newer home in the $200,000-$250,000 with the amenities they want. Because of the increase in regulation and in many instances material cost, builders simply cannot build a new custom home on a .3 acre lot and stay within that price.
When the economy turns there will be a pent up demand for home builders. Until then, my advice to home builders is to reinvent yourself and expand into other areas of construction such as remodeling, insurance restoration, and small commercial contracting.
Last month, my wife Jana, ran an ad on Craig's List for a Real Estate assistant to help us process paperwork. We had one MBA, and at least 8 recent college grads apply for a job that starts at $24,000. While we are delighted to get such quality applicants, I don't think an MBA will find this a rewarding career. My point, it is still a tough job market in this area and throughout most of the country.
Of the new homes sold this year only 4 have sold for over $250,000. What does this say? Many if not most of the new home sales were to young Marines that are in the $150,000-$200,000 price range. Marine officers that use to buy in the $250,000-$300,000 are opting to rent now instead of buying. The protracted weak economy has caused many folks that have good jobs to stay where they are for fear of losing their jobs.
Also, many of the retires relocating to this area are looking in the $200,000-$250,000 price range whereas they use to be looking in the $250,000-$350,000. They can find an existing newer home in the $200,000-$250,000 with the amenities they want. Because of the increase in regulation and in many instances material cost, builders simply cannot build a new custom home on a .3 acre lot and stay within that price.
When the economy turns there will be a pent up demand for home builders. Until then, my advice to home builders is to reinvent yourself and expand into other areas of construction such as remodeling, insurance restoration, and small commercial contracting.
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