We’ve all heard the news. Real estate across the nation has turned into a seller’s market for most regions. Home values have gone up, buyers are on the prowl, and confidence has been slowing recovering in the economy. But one of the biggest indicators to a healthy economy is new construction. For years, we’ve seen a slump in new projects. Builders put things on hold as the industry and economy plummeted after 2007-2008. Dozens of houses went into foreclosure. Lots remained vacant. And the government sought ways to recover.
Then came the summer of 2013. We finally saw signs of recovery. Mortgage rates rose a few points and the Federal Reserve started to change its policies once again. Stimulus support withdrew a couple steps and funds were put into new construction incentives. Banks now saw an opportunity to gain a return investment on the properties that foreclosed — which is why you’ve probably seen a recent increase in new construction around the Charleston area.
But the looming question of all this is: How will new construction affect the seller’s market?
A Closer Look at the Seller’s Market
Homeowners have had a clear advantage for the last couple years when it came to selling their home. For the Charleston area, homeowners could expect an offer in a couple of weeks (if not days). Sometimes there would be multiple offers, leaving room for easy negotiations. Barely any homes were on the market and buyers couldn’t be picky. New construction was at a halt. Home sellers could get a premium for their property.
Neighborhood Examination: Darrell Creek
Though we’ve experienced a seller’s market for the last year, it has still been rare to find a home on sale. Take the neighborhood of Darrell Creek for example. Located in North Mount Pleasant, the subdivision began to boom once Wando High School was built nearby. Lots were being sold like crazy until the market crash. Since then, a large majority of the area remained forest. Then came the recent mortgage changes in the summer of 2013. Banks found their chance to begin selling off their empty lots. The market was up again — as home values were rising and buyers were everywhere.
Today, over 10 different homes are being built (since the beginning of July). Builders are out constructing again and the market is soon to be crowded with more homes for sale. So, what does this mean for the seller’s market?
Future Projects for the Seller’s Market
With new construction booming around Charleston, it will obviously place more homes on the market. Home buyers will have more choices and the negotiating table with have an equal playing field. Yes, values will continue to rise (which is great for homeowners), but the time it will take to sell your home might be extended a little bit. You might have to do a little more “selling” to get buyers to bite.
If new construction continues at an accelerated rate (which it probably won’t), the market will have a variety of homes for sale. Homeowners will price their properties a little bit lower to grab attention from buyers, and the market will try to balance itself. It definitely is one of the federal government’s prime directives at the moment. However, with all this being said; we might not see the actual affects for a year or so. Real estate and the economy move slowly — but it’s always good to prepared.
Selling Your Home in the Charleston Area
If you’d like more information about selling your home in the Charleston area, contact us today or read our free home seller’s eBook. We also have plenty of articles about selling your home, which can be found here: Sell My Home.