2021 Northern VA New Construction Homes Market Updates
1st Half of 2021
2020 and 2021 have been as crazy for the construction industry as it has been for the rest of the world.
Northern VA is no different. New development of both raw land and existing older homes is a crucial part of the market.
The Northern VA market overall has had an inventory problem for some time. You would think that when there are few homes for sale, builders are incentivised to begin to build and make up the deficit.
However, that has not happen. Delays in material shipments, increases in lumber and other material prices and other supply chain problems made building new homes more of a challenge than usual.
On top of that, builders had to acquire land to build. The real estate market in Northern VA has been red hot and builders have had to compete with other buyers for homes to tear down and land to develop.
So the inventory has been kept extremely low, for both resale and new construction homes.
So where are we now? Let’s have a look.
Northern VA New Home Asking Prices Have Increased
This is not a surprise, as builders cost to build a home rises, so do the asking prices.
And they have consistently been receiving the asking price for homes that are selling, with the average sale-to-list price hovering right around 100% according to the BrightMLS data.
However, if you are buying you will benefit from the fact that the rates are historically low in 2021, so if you are looking to live in a home long term there is still opportunity in the market of new construction.
Low Inventory of New Homes
Just like the rest of the Northern VA market, the inventory has taken a huge hit on the new construction home front.
As mentioned above, builders have struggled to find new land to build on. On top of that, delays with supplies, quick sales of current inventory and permitting backups have caused the supply to fall.
The question is, when will the inventory problem in Northern VA get better?
New Listings of New Homes are Steady
The cure for an inventory problem? More listings for sale. New construction home listings have seen a little increase since April, however there are not a large jump, YET.
“Yet” is the big word there. The number of resale listings in June 2021 were 21% higher than June of 2020. And the number of new resale listings has increased year over year for the last 4 consecutive months. July is on pace to make that 5 consecutive months.
So how does resale inventory affect new construction? When there are more resale homes for sale, more new construction homes will stay on the market longer and allow the supply to catch up. But it will likely take awhile to catch up. Especially since other factors still need to be worked out, such as supply of lumber and other materials.
- New homes so far in 2021 continue to have low inventory, both nationally and in Northern VA. However, there have been signs in the summer that the inventory could increase some time soon.
- As a result of Covid, builders have dealt with material shortages that have affected the cost to construct a home. Permitting also was backed up in many counties as homeowners stuck at home took on new projects.
- The mortgage rates are at historic lows still in mid 2021, and it is generally expected they will hover around, give or take, the 3% mark for the near future.
- There could be a good opportunity for you if you are looking to buy a new construction home in Northern VA, because the rates continue to be low, and the supply of resale homes is increasing.
What Areas are Included?
These stats cover the following “Northern VA” area: Fairfax County, Loudoun County, Prince William County, Alexandria City, Arlington County, Fairfax City, Falls Church City, Manassas Park, Manassas City
- Here is more information about builder’s material escalation clauses. These have become much more common in new construction contracts since 2020.
- Here is more information about whether to get a home inspection on a new construction property.
- If you want to stay updated on the Northern VA real estate market as a whole, bookmark this page.
- Here is the ultimate guide on new construction homes in Northern VA.
Have a real estate question? In the market to look for a new construction home in Northern VA?
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