Join 1,000+ Subscribers

Research & Insights

We publish free and premium research and insights on the local housing market  to help Realtors, industry professionals, homeowners, and the academic community understand current trends in the market.

Seizing Real Estate Opportunities: Trends in New Construction

home sales jacksonville market trends new construction Jul 28, 2023

Let's start out with a quote from a recent presentation I did for several local real estate brokerages to set the mood:

"The entrepreneur always searches for change, responds to it, and exploits it as an opportunity." 
-Peter Drucker 

The market provides us endless opportunity as it is always changing.

You just have to be seeking opportunity in order to find it. 🧐

Speaking of that, here are some opportunities I've found recently...

 

The Growing Divide in Real Estate

Breaking the real estate market into two components (new and existing homes) can uncover some trends worth noting.

In this graphic, you can see that there is a growth trend πŸ“ˆ in new construction sales while existing home sales are declining πŸ“‰ since 2021. 

This isn't too surprising as so much existing home inventory has been bought up since 2020.

Current owners are locked in at 3% on their mortgage so they aren't selling.

This leaves new construction as the main source of new inventory to the market and is part of why it is growing. πŸ—οΈπŸ˜οΈ

 

You Get the House Plus...πŸ’°

If you've been active in real estate for the past 12 months, you have experienced a shift in seller strategies.

Before rates went up, it was how much can you squeeze out of the buyer. πŸ€‘

Now, it's more balanced. If there's a mortgage involved, the negotiations are focused on seller credits/incentives in order to get a lower interest rate and lower closing costs. 

To actually measure how much incentives have changed, I pulled the historical seller concession amounts to chart them over time.

The full post I did covered new and existing homes, but new construction really wowed me.

The average incentive to buyers when purchasing a new build is up 75% since the beginning of 2021. 🀯

Part of this is because they want to capture the business with their in-house lender and title company to keep profit as high as possible. They do this by giving credits to buyers if they use their preferred partners.

The other part of it is because buyers are requiring benefits like a 2-1 rate buy down and fewer closing costs to feel comfortable.

 

What It All Means 

The main point we should take away from this is that the market is always changing and adapting.

It's a bit like running water and will find its way downhill to keep moving. 🌊

Understanding these trends will help you navigate your business to the growing sectors within the market. πŸ‘πŸΌ

Further, flowing with the market will help you to continually find opportunities rather than becoming frustrated because things aren't how they used to be.

Are there strategies you're holding onto that aren't effective any more? πŸ€”

That said, this information highlights the value of specializing in new construction moving forward.

It is a growing market and if rates stay higher, could be the primary source of business given the leverage the builders have to sweeten the deal. πŸ’‘

Go seize an opportunity! 



Whenever you're ready, there are 3 ways I can help you:

  1. Market Insiders Coaching Membership: Join an exclusive group of Realtors focused on becoming experts in their local market. This membership gives you access to monthly live coaching from yours truly, a member-only community for private updates and discussions, and additional resources to address clients questions and supercharge your business.

  2. How to Use Market Stats in Your Business: Accelerate your business growth by learning how to use data. This course will help you more easily understand the market, improve your client presentations, and increase your conversion rate with clients.

    Rated 9.84 out of 10 for value to their business by 100+ Realtors.

  3. Schedule a live presentation: Want to learn in person? I offer quarterly market updates and in-person training in the Jacksonville area. Just submit a speaking request and we can get it set up.
FREE WEEKLYΒ MARKET UPDATES

Get the pulse of the market in your inbox.

Each Monday you'll get ourΒ best content from last week to keep you going with the latest research.

You're safe with me. I'll never spam you or sell your contact info.