One of the last signs of recovery in the housing market is the building of new real estate.
As more builders are seeing limited inventory, they are responding to the demand with new construction. From Northern Virginia real estate to California housing, you need to know which cities are the hottest markets for construction.
One of the hardest hit metro areas during the recession, Phoenix has made a remarkable turnaround in the past few years. The number of construction permits went up 25 percent from 2014 to 2015. A thriving economy is the result of more jobs with an additional 80,000 jobs expected for 2016. The city is preparing for another 110,000 people to move into the area.
The difference in cost of a new home over an existing property has narrowed. Builders are also providing more amenities to appeal to buyers, such as fitness rooms and club areas. Newly-built condominiums are designed to compete with luxury apartments with exceptional finishes and top of the line appliances. Every price point is represented in these new homes with properties beginning in the mid-$100,000 and climbing to over the $ million mark.
Seattle is prime for real estate investors because new construction has been low while demand for housing has been high. It’s not uncommon for a real estate agent to be working with a one-month supply of properties in certain neighborhoods. Housing prices have gone up as a results.
This area hasn’t been a popular market for developers because of the restrictions being imposed. For instance, permits haven’t increased due to the regulations from the state on developing condos. However, investors who are interested in the long-term with five to ten single-family homes being built at a time will excel in this market.
Tulsa has developed as a strong market due to the growth in employment by the oil and gas companies in the area. The expansion is moving outside city limits with new suburbs being built. The downtown area has focused on creating trendy neighborhoods to appeal to younger buyers.
The focus is on space with square footage going over 5,000 feet in some cases. Luxury living is popular in these locations with homes that feature media rooms and plenty of space for guests. Low inventory in the area ensures the demand will continue as long as the Tulsa economy remains strong.
Kansas City, Missouri
Permits for single-family homes rose by 10 percent in 2015 with options available for entry-level buyers as well as those who are looking for custom high-end homes. New subdivisions have been built around the city with Millennials leading the way along with empty-nesters who are looking to downsize. Both groups want homes that are move-in ready with nice amenities.
Talk to any local real estate agent, and they will explain that modern features, such as wood floors, nice tiling, walk-in closets and granite countertops sell a house. They also want plenty of space for entertaining and living.
Another area that has seen massive growth is Chicago. Residential construction has been impressive with a 13 percent increase from February 2015 to February 2016. For the year-to-date, spending on this segment has showed an increase of 94 percent. It has had one of the largest jumps in the entire country. Almost 70 percent of the housing permits requested in 2016 have been for multi-family housing while single-family housing inventory is also down.
Investors will see real potential in Chicago whether they prefer to focus on multi-family rental units or single-family sales. For those in the real estate business, this isn’t new news. Chicago has been faring well for some time, with it landing as the #6 construction market in 2014. Today, homes sales are at a nine-year high. Limited inventory is driving up prices, but buyers still flock to homes that are listed in hopes they will get lucky in this tight market.
Investors and developers who are looking to find solid markets where they can capitalize on limited inventory to build brand new properties either for buyers or as rental properties will see these five markets for their immense potential.
The key for these professionals is to work with an experienced real estate agent who knows the local market and can help them find the right properties with continued growth potential.
Markets in real estate can change quickly and it pays to work with someone who can anticipate these changes before they occur to protect your investment.
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