As we enter Year Two of the coronavirus pandemic, home buyers seeking more space or a sanctuary of their own are struggling to find properties for sale. The number of listings for available homes is about half of what it was a year ago—and pickings were slim even then. Like it or not, it’s the new real estate math: Rising demand plus shrinking inventory equals vexed buyers, desperate for solutions.

So why aren’t people just building more new homes? A whole lot of them?

Well, after slowdowns in new home construction that stretch all the way back to the late aughts housing crash, newly built communities and custom-built residences in many cities are indeed ramping up again. Builders applied for 14% more permits this year than last, according to U.S. Census Bureau data—a good indication of where new construction is going to be popping up as it usually takes about seven months from start to finish to build a house.With the demand for housing leading to soaring prices and crazy bidding wars, the realtor.com data team took a look at which parts of the country could, just maybe, get some relief with some brand-new inventory .

The areas experiencing much of the new construction are often in the South and the West, particularly the Sun Belt. These are places with growing populations due to strong economies marked by lots of jobs and often—but not always—lower costs of living. They also tend to have more land available and fewer restrictions on construction.

The pandemic has exacerbated these trends. After staying at home for roughly a year, many folks are jonesing for more space. Suburbs and more rural areas, where there’s room to put up larger homes, have become more popular than condos in the big, expensive cities. And as white-collar workers from more expensive parts of the country are able to work remotely, they’re seeking larger homes farther out.

“Builders are looking to grow wherever they can right now,” says Rick Palacios Jr., an analyst with John Burns Real Estate Consulting. “COVID has ignited demand in markets where there wasn’t really a lot of demand before.”

The problem: Even those builders who have boosted production simply can’t meet the voracious demand for real estate. As the housing market has improved, it’s becoming more difficult to secure skilled labor and materials, especially lumber.

“I don’t think they can keep up with this pace, simply because of the supply-side issues,” says Danushka​ Nanayakkara‑Skillington, associate vice president of forecasting and analysis at the National Association of Home Builders.

So where are the new homebuilding boomtowns? We analyzed the data to find where builders filed the most permits to put up single-family homes, condos and co-ops, apartments, townhouses, and duplexes. We limited our list to one metro per state to ensure geographic diversity. (Metros include the main city and surrounding towns, suburbs, and smaller urban areas.)

Grab your hard hats, and let’s check out some new construction!

1. Dallas, TX

Median list price: $373,267
Number of permits: 11,636
One-year change in permits: 23%

It’s no surprise that a Texas metro heads up this list. People across the U.S. have been relocating to the Lone Star State for years thanks to its abundance of jobs, business-friendly climate, and affordable housing. The lack of red tape to put up new construction has also made it an appealing destination for builders. In fact, if we hadn’t limited our ranking to one housing market per state, Houston and Austin would have also made the top five.

Companies such as Toyota, Charles Schwab, and Amazon are expanding or relocating into the Dallas area due to lower taxes and other incentives. That’s bringing in new workers in search of places to live. Meanwhile, out-of-state buyers who can work remotely are being enticed by large patches of land and overall affordability.

“People have a newfound appreciation for how important home has been over the last year,” says Phil Crone, executive officer of the Dallas Builders Association. “Our market being more affordable, that’s why you see such strong growth.”

2. New York, NY

Median list price: $629,500
Number of permits: 9,097
One-year change in permits: 2%

The reason builders have filed so many permits in the New York area is simple: It’s huge. The metro area encompasses not just the city, but also the surrounding suburbs upstate and Long Island as well as parts of Connecticut, New Jersey, and Pennsylvania. Builders may be constrained by a lack of land and high prices in the city, but they’re finding opportunities the farther out they go.

“The suburbs are clearly having their day,” says New York City–based real estate appraiser Jonathan Miller. He’s seeing more construction outside of the city than within it these days.

But Miller warns the suburban boom may not last forever. As vaccines become more available and the coronavirus is brought under control, corporations have indicated that they will begin bringing employees back into the office by fall. Workers may not want to contend with those long commutes and could seek out condos, co-ops, and apartments within the five boroughs. This could provide an incentive for builders to ramp up construction within the city again.

“When companies start calling employees back, you’re going to start seeing a surge in activity right away,” Miller forecasts.

3. Phoenix, AZ

Median list price: $469,500
Number of permits: 8,614
One-year change in permits: 9%

Phoenix has long been a haven for retirees, and more recently for Californians seeking affordable housing and more space. Large tracts of available land mean people used to high SoCal prices can build the homes of their dreams for a fraction of the price.

The expansion has grown beyond Phoenix proper though. In nearby Mesa, thousands of new housing units are going up, transforming its downtown. The growth there is partly attributed to a light-rail system that connects it to Phoenix and Tempe. Builders are also ramping up in Queen Creek, a suburb just south of the airport.

4. Washington, DC

Median list price: $499,900
Number of permits: 5,795
One-year change in permits: 30%

The nation’s capital is a perennially desirable real estate market thanks to the large concentration of gigs centered around the chambers of government. Amazon’s decision to open a second headquarters, and bring on 25,000 highly paid workers, also gave the area’s housing market a boost leading to higher demand and prices.

Over the past year, buyers searching for more spacious abodes have sought out new construction in the suburbs of Loudoun and Prince William counties in Northern Virginia. White-collar workers who no longer have to commute to DC proper during the pandemic are more willing to expand their search radius, says Mark Ingrao, CEO of the Northern Virginia Building Industry Association.

“They want space out away from people, and away from the city,” Ingrao says.

5. Atlanta, GA

Median list price: $377,500
Number of permits: 5,721
One-year change in permits: 1%

The Atlanta region, known for its sprawl, has also seen massive growth in the past year or so. But there just isn’t enough inventory to sustain the demand, so builders are looking to break even more ground in Atlanta’s web of suburbs and exurbs.

Despite having one of the highest number of permits pulled in the U.S., the pace of growth is slower compared with other cities. That’s largely because the metro region was overbuilt in the runup to the financial crisis just over a decade ago. In the wake of the crash, state and local lawmakers made it harder for builders to break new ground, says John Hunt, president of MarketNSight, an Atlanta-based real estate research company. That’s made it tougher for builders to step on the gas.

“We’re not seeing the growth in permits, but the demand is there,” Hunt says.

6. Los Angeles, CA

Median list price: $1,184,500
Number of permits: 5,306
One-year change in permits: 7%

Despite making our list, there isn’t exactly a home-building bonanza happening in Los Angeles. Like New York, overall size earns it a spot.

Much of the new construction in the area is replacing the homes lost to natural disasters, such as the mudslides or the wildfires that have devastated the state.

But California’s rigid zoning laws and restrictions, as well as high land prices, have stood in the way of more homes going up. It’s simply more expensive and time-consuming to put up new housing here than in many other parts of the country, a problem reflected in the area’s high prices.

To address its shortage of affordable housing, the city of L.A. recently launched a program to encourage new builds of smaller units like carriage houses on already existing properties. A lot of new construction is going up on the outskirts of Santa Clarita and the San Fernando Valley, says Palacios of John Burns.

7. Seattle, WA

Median list price: $672,386
Number of permits: 5,169
One-year change in permits: 38%

The huge growth of the Seattle area extends beyond its big employers Amazon and Microsoft. Remote workers have also been decamping here, and there aren’t enough homes to keep up with demand. In 2020, the Puget Sound region recorded the second-highest price growth in the U.S.

The growth and scarcity of homes for sale have led buyers to seek out new construction, driving up permits. Seattle’s University District is experiencing a boom in new apartment construction, as are areas outside of the city, such as Redmond. A new development featuring nearly 300 apartments is slated to go up in the city, just 10 minutes from the Microsoft campus.

8. Philadelphia, PA

Median list price: $329,900
Number of permits: 4,653
One-year change in permits: 52%

The Philadelphia area has become even hotter since the start of the pandemic, as workers fleeing higher-priced New York have been arriving in droves. Inventory has reached record lows, with the number of homes available for purchase falling below 3,000 for the first time last quarter. Demand for homes in outer neighborhoods has grown more compared with the city center, as people look for more space to adapt to their pandemic lifestyles.

Less restrictive zoning laws in the past 10 years and Philadelphia’s 2035 plan, a two-part, comprehensive project to expand development, have also paved the way for builders to break ground in recent months.

9. Charlotte, NC

Median list price: $386,450
Number of permits: 4,359
One-year change in permits: 11%

Relocation buyers from hubs like New York and California have been flooding Charlotte during the pandemic, as boomers decide to retire early and millennials look to put down roots, says Evelyn McCorkle, a local broker and Realtor® with Helen Adams Realty. But bidding wars on existing homes have disillusioned some prospective buyers.

Some have decided to build their own homes instead, which comes with its own set of headaches. Builders don’t have enough inventory or lots, McCorkle says. Instead builders are putting people on waiting lists or releasing land on a first-come, first-serve basis. That’s created its own competition, with mad dashes for empty lots.

Popular areas for new construction include suburbs like Mint Hill, Huntersville, and Harrisburg.

10. Tampa, FL

Median list price: $305,000
Number of permits: 4,251
One-year change in permits: 24%

The Tampa Bay area has long been a spot for retirees and people looking for warmer weather and lower costs of living. But since the pandemic, things have been moving at a head-spinning pace, says Bob Glaser, president and CEO of Smith & Associates Real Estate. The Super Bowl also put an extra spotlight on the area, drawing in out-of-state buyers.

Like elsewhere in the country, Glaser says demand is nearly unmanageable as buyers line up to pick out their dream homes and lots. Housing communities in the suburbs are able to continually raise prices and still have a long waitlist. Condos that aren’t even complete yet are already 70% sold out, something that was previously unheard of in this market.

“I look forward to it slowing down a bit somehow,” Glaser says. “But there’s no reason for it to slow down.”

Article by Elena Cox on realtor.com

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