In the middle of a pandemic, in the middle of a massive recession with job losses being registered in the millions, there is a boom happening in the real estate industry. This time can only be described as a convergence of trends that have been in the making for years.
The national epidemic of homes available for sale has been ongoing since 2018. The number of homes that have been available for purchase have decreased by over 50% nationwide, and in the state of New Jersey they have decreased closer to 60%.
Single-family homes available in July 2016 were reported to be 46,380 and in July 2020 22,440.
The shortage has fueled a great deal of builder confidence, producing a 35-year high, as reported by the National Association of Home Builders. Last week the NAHB reported that current sale conditions, sales expectations and traffic of prospective buyers all hit their highest ratings ever.
What is somewhat disturbing, considering the exodus from densely populated urban centers such as New York City, Boston and Philadelphia, is that the Northeast gained 11 points, more than any other of the four regions, hitting 76.
Still, the West appears to have the most confident area, hitting 85, following the South, which hit 79 and the Midwest 72.
Perhaps such positive sentiment is also being fueled by the record low interest rates.
Still, there are conditions that are holding back builders from an all-out building boom, taking form in both skilled labor shortages and shortages of raw materials. What is complicating matters even further for the builders is that lumber prices have risen 170%, creating a cost increase of $16,000 for a standard single-family home.
Residential construction employment rose in August by 27,700 to 2.9 million, according to the Bureau of Labor Statistics.
If you have any questions about this information or title insurance, please contact Ralph Aponte: 732.914.1400.
Counsellors Title Agency, www.counsellorstitle.net, founded in 1996, is one of New Jersey’s most respected title agencies, serving all 21 New Jersey counties with title insurance, clearing title, escrow, tidelands searches, and closing and settlement services for commercial or industrial properties, waterfront properties and marinas, condominiums, townhouses or residential single family homes. Counsellors Title also features its own Attorney Settlement Assistance Program™ [ASAP], which is an individual resource customized to fit the needs specifically of real estate attorneys, including, Documentation, Preparation, Disbursement of Funds, Attendance at Closing, HUD Preparation or Post-Closing Matters.
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