New Home Sales Up in April
As the coronavirus has disrupted health and lives everywhere, it has also impacted the economy. Californians have lost more than one-fifth of jobs, and 1-in-14 mortgage borrowers nationwide have sought house-payment forbearance. Yet during this uncertain time, the SoCal construction housing industry may be a bright spot.
New and clean
With all that is going on, it’s no surprise that April has been a difficult month in the housing market. DQNews reports the worst April resale market for Southern California, even worse than the mid-1990s housing slump or the bubble-bursting Great Recession days. Only 12,600 existing homes and condos sold; this is down 33% in a year. No wonder. Safer-at-home orders required people to stay put and many homeowners pulled properties off the market.
New homes were 9% of April’s SoCal sales verses 7% a year ago. Considering today’s circumstances, it’s understandable why buyers would seek out brand new homes; they haven’t had other people living in them. Thus, with everything new and clean, at a time when cleanliness is so important, fresh construction is very appealing. Additionally, while there may be a lack of inventory on the resale side, builders can offer finished but unsold homes.
Revitalizing the housing market
During this economy, some builders selling new construction also seem willing to provide discounts to potential buyers. Building industry analyst research indicates
roughly two-thirds of builders are promoting incentives such as assistance with closing costs, interest rates or upgrades.
In Southern California, San Diego and San Bernardino Counties are hot markets for new homes. Additionally, a new community in Rancho Mission Viejo has been able to sell out its first phase with 14 homes under contract. Construction plans are now being made for the other lots, even as virtual tours and online marketing are more the norm in the new social distancing world.