The Return of the Housing Market, and What it Means for Builders

September 12, 2019

home sales figures

During the "Great Recession" of 2008, home values fell and many Americans lost their homes. Home builders produced fewer houses, and sales largely declined. A more subtle impact that the housing crisis had on the market for new homes was the shift in buying habits from purchasing unbuilt or semi-built homes to favoring completely built homes. For home builders, the spec home represents the economical option for their prospects. For buyers, it’s the least expensive and most practical option. In the years from 2008 to 2011, the share of new home sales from pre-built houses were higher than any year prior to the recession. 

Home Sales by Stage of Construction

Number of houses sold in thousands
Data: census.gov

 

New home sales haven’t returned to their levels since before the housing bubble popped, but they’ve been steadily increasing year-over-year since 2012. Builders should be excited about this, but there is another change in the market they should know about — at last, shares of new home sales nationwide have shifted back in favor of unbuilt and semi-built houses. 

In post-recession times, buyers are becoming more willing to build houses with their individual preferences, and spend a little more to do so. They are daring to imagine what the ideal home could look like for their family. For the home builder, it’s a ripe opportunity to boost their lead capturing efforts through their model home showings, which continue to be a great way to inspire prospects to dream of homeownership.

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