New home prices are skyrocketing. During the pandemic, the demand for new homes was at an all time high. The ease of purchasing a new home, sometimes right from your living room, coupled with the desire for a brand new home, and the ability for more people to work from more remote locations, created a demand that new home builders are unable to keep up with.
Home builder confidence is at an all time low and new applications for mortgages for new homes has taken a nose dive. Personally, new home builders are not calling back the home buyers that have registered on their list, which is a huge reason why having an agent help you buy a new home is a major benefit. We don’t mind calling the new home builders and bugging them to get a response. New home builders are swamped in San Diego, this is due to the lack of areas to build and the some times challenging building permitting process here in San Diego
Builders are having a hard time getting permits for single family homes which is why you will see more condos and townhomes vs single family homes. In fact there is one project on the books for Encinitas to have 30 homes built and the home owners there are fighting it. So not only do home builders have a hard time getting permits, they also have home owners fighting against their projects.
Home builders know we need more building to happen, especially as the chief economist of the national associations of realtors has pointed out that we had a huge housing shortage pre-pandemic and is soaring now. Add the incredibly high rents and the demand to buy a home is skyrocketing again.
Access to Materials Becomes Challenging
Supply chain has also been a huge cause of this. Shipping containers arriving in the United States have been heaviliy delayed. According to businessinsider.com increases in consumer spending and, as a result, a spike in imports, have overwhelmed the ports.
California port backlogs are already helping drive shortages and delivery delays in the US.
On January 30, Southern California port congestion hit a record high when 38 container ships were waiting along the coast for room to open up to dock and unload, but current capacity is nearly at record levels.
Customers are already seeing the impact of the delays. They are facing rising prices and limited options as commodities become increasingly difficult to obtain and produce due to the port delays. Companies are being increasingly forced to compete for containers and delivery dates.
How To Buy a New Home
So what should you do if you want to buy a new home? First contact a local realtor to help you get on the interest list and push your application forward. Home builders are hundreds deep in their applications and oftentimes the buyers are not even notified if a home comes available. It is crucial to have an advocate at a time like this.
Make sure you are preapproved. Oftentimes the builder may want you to use their preferred lender. However, getting preapproved by your trusted lender first will give you a better understanding of what you can afford without the pressure of dealing directly with the builder. Additionally, any lender can match then incentives that the builder’s lender is offering you.
Your credit will not be affected if you are shopping for a mortgage. The credit reporting agencies realize that you are looking for the best rate and the best mortgage for your situation. Just make sure to do it all within a 3 month span.
Get on the LIST!
Get on as many new home lists as you can. You can always pass later on, but you cannot get higher on the list. The builder will go through the interest list one by one and offer the newly released homes to each person. It is important to get on the list at the very beginning, even if you are not sure you want to move to those new homes. Work with your realtor to be alerted to all new home developments being planned in the future. A good realtor can find out this information by working closely with the builders. CONTACT ME today for help to get on NEW HOME INTEREST LISTS
Tristen Campanella is a local San Diego real estate agent. She is one of the top real estate agents in San Diego. Tristen takes time to guide her clients so they are successful in buying or selling a home. She understands that life starts at home!