The housing market, particularly the new construction sector, is rebounding from the February 2021 slowdown; this rebound comes at a critical time as the California real estate market continues to struggle with inventory. In March 2021, new construction on homes increased by 19% from February 2021, and 37% from March 2020. Similarly, permitting for new construction increased by 2.7% from February 2021, and 30% from March 2020.
Notably, In March 2021, new construction on single-family homes increased by 15%, while new construction on multifamily properties increased by 30%. The inventory shortage has been driven by pandemic-related shifts in preference towards larger homes as well as the entry of millennials into the single-family housing market. Given the massive surge in demand, paired with the hesitance of many current homeowners to place their homes on the market, it’s no surprise that demand has outpaced supply. New construction represents a way to increase supply when less homes are being placed on the market.
Given the demand for new homes, builders can expect plenty of business over the next few years, despite the fact that the cost of lumber has reached an all-time high.
At the Chernov Team we understand that knowledge is power, and knowledge of how various subsectors of the real estate market are performing is powerful knowledge indeed. At the Chernov Team we know that whoever comes to the table most prepared leaves with the most, and the Chernov Team always leaves the table with the most.
New Construction Sector Rebounds After February Slump
