Chesterfield County Sees Surge in New Home Construction
New home construction is surging
Anyone that has driven around Chesterfield County lately should have noticed that there has been a recent surge in new construction; both commercial developments as well as residential properties. A good example of the new home construction occurring in Midlothian VA is the under construction village of Ashton Village at Charter Colony. According to Nancy Kelly of HH Hunt Homes the Aston Village development is well underway and only 7 lots of the planned 24 are left. Kelly also mentioned that the current sales rate puts them ahead of their forecast and they are looking at Phase Two of the project, which would add an additional 16 units.
The new units are targeting what HH Hunt sees as an active segment right now; 1st time buyers looking in the $200,000 to $250,000 range. These buyers are showing up more frequently these days for a number of reasons.
Mix of Forces Causing Increased Demand for New Homes
Mortgage Rates Remain Low
Today’s mortgage rates remain at very low rates, which has the same effect on sales as low prices for home buyers that are financing their purchase. Buyers that are financing their home purchase will be considering the effect that their mortgage payments will have on their monthly budget and because interest comprises a significant portion of the amortized payments the low mortgage rates make the homes seem less expensive.
First-Time Home Buyers are Popping Up
In a surprising development, first-time home buyers are starting to show back up on the scene. While first-time home buyers have been rare in the housing market over the last five years, primarily due to difficulties getting qualified in a tough economy, they have started to show back up. While their numbers are not abnormally high they are a significant presence because the normal level of experienced home buyers is in comparison still subdued.
Resale inventory is low
One of the factors that seems to be keeping many experienced home buyers out of the current market is that they are current locked into homes whose prices are lower than what the owners believe that they need to get to move out of the home. Many of the current home owners purchased their homes during the higher prices of the previous decade and in some cases this effect has put homeowners “underwater” on their mortgages. This situation also has the dual effect of low resale inventory and low purchasing activity by the experienced homeowners.
Buyers are turning to new constructionIn reaction to the low inventory of suitable choices for first-time home buyers in the resale market, they seem to be turning to new construction options and the new home builders are more than happy to build new inventory to meet their needs. At Team Hensley Real Estate the team confirms these circumstances, if only with the anecdote that they recently put a resale residential listing on the market in a neighborhood and price point that was first-time buyer friendly and within four days had multiple offers on the property.
Ellen Clark Team