New Construction Up Significantly

According to CNBC new home sales are up almost 15% and the highest price jump on record since 1963. Charleston, SC homes prices have gone up as well. Existing-home sales also rose slightly last month to reach their highest level since late 2009, while the supply of homes for sale took a big jump but still remains tight, the National Association of Realtors said Wednesday.

April’s annual sales rate was the highest since November 2009, when sales hit an annual rate of 5.44 million. But sales are still at a relatively low level. From 2000 through 2005, before the housing bubble burst, the annual rate of sales averaged more than 6 million a month. Although to most agents things are almost booming it is a misleading because the boom for builder and sellers really has to do with lack of inventory in available Charleston, SC real estate listings. The inventory of homes for sale, meanwhile, expanded in April to a 5.2-month supply from 4.7 months in March. That means all the homes would sell in that time-frame if no new supply was added. Realtors consider a 6-month supply to be a balanced market between buyers and sellers.

 

“The robust housing market recovery is occurring in spite of tight access to credit and limited inventory,” says Lawrence Yun, NAR chief economist. “If not for those constraints, existing-home sales easily would be well above the 5 million-unit pace,” he said. New-home construction is needed to alleviate the inventory tightness, he says, and “tame” price growth to a healthy pace.

While here locally – Charleston, SC new construction is up +8.6% from May of 2012 as seen on the left.