The Cost of New Construction
In this new video, Windermere’s Chief Economist, Matthew Gardner, explains why there isn’t more home building taking place to help satiate buyer demand. His three main reasons boil down to the cost of land, labor, and material costs – which make it expensive to build a home.
In response, our Acquisitions Broker, Dan Wilcynski, has this to add:
“Matthew’s reasoning for the lack of supply in the new construction arena is spot on. Builders simply can’t build enough homes in Seattle to keep up with demand due to cost – land, labor and material costs all continue to rise and some more dramatically than others. While it may seem there are construction cranes erected in every neighborhood around town and large scale buildings going up on every other block, a high percentage of large, residential projects are for-rent apartments, which certainly do not provide purchase options for would-be homebuyers. It’s not to say nothing is being built – in fact approximately 17% of all homes sold in Seattle over the past 12 months were new construction – but there’s not enough supply of any type of housing to satisfy the demand from prospective buyers and new construction is especially attractive to many would-be homeowner’s who lead busy lives and want a low maintenance, energy efficient home built for today’s standard of living. There’s bound to be a tipping point when costs rise to the point where buyers can no longer afford to pay the premium for new construction, but at the speed in which new homes continue to sell in Seattle today, it seems that point is still a ways off!”
If you have any questions about new construction homes in Seattle, land use and permitting, or are wondering if your property would be of interest to a developer, reach out to Dan at (206) 715-5349 or email firstname.lastname@example.org.