Connecticut is realizing a huge surge in new home construction, which is great for the local economy, but is it holding regular sellers and real estate investors back as the competition heats up?
According to a U.S. Census survey residential building permits have raced upwards by 47% in the last two years. As the economy, confidence and housing markets have begun a healthy turn around, home builders have been enjoying a huge surge in demand and many report difficulty in finding enough land to keep up.
Recent news headlines have highlighted just how crazy the market is getting. Home builders across the country are attempting to prevent buyers from camping out for weeks ahead of opening events by hosting auctions or lotteries instead.
Some may be concerned that this hunger for newly constructed homes could hurt the average CT homeowner or take some of the fire out of flipping houses for real estate investors.
However, there are a number of factors at play which mitigate this, including:
- 67% of permits issued in Fairfield County are actually for multifamily apartments
- Homes are being demolished (almost 1k in Fairfield) creating a shortage of inventory
- Due to rising labor and building material costs new homes are selling at a steep premium
- There simply aren’t enough new homes being built fast enough to meet demand
- Lack of trust in developers following shady practices at height of the previous boom
In other words, the competition from home builders in the Connecticut real estate market really isn’t at a point where it will depress re-sales of existing homes.
Success in selling CT homes fast today is really all about positioning. Those wholesaling houses really aren’t competing with builders at all. It’s a completely different product and breed of home buyer. Those flipping houses and regular homeowners wanting to get top dollar for their homes can also find that, with attractive improvements, they can offer an equally attractive product for less.
