New home construction slips, but demand still high
Fewer new homes were built in February. In fact, housing starts plummeted in the Northeast and in the Midwest as a result of frigid temperatures and heavy snowfall. Despite the decrease, demand remains high in New Jersey.
The Commerce Department said Tuesday that builders began construction at a seasonally adjusted annual rate of 897,000 homes in February. That is a 17 percent drop from January. Housing starts fell 56.5 percent in the Northeast, but in New Jersey, there remains a demand for new construction.
Generally, with sub-zero temperatures and heavy snowfall, sellers do not want people walking through their homes in snow boots and buyers do not want to be out and about fighting the frigid temperatures.
"It's not unusual in the northeast to be slow during the first quarter. Many people are recovering from the holidays and don't have the extra money on hand to buy a home. Also, in New Jersey this winter, the weather has been unbearable, so it's taken a lot of the fun out of the process," said Amber Noble-Garland, licensed New Jersey realtor with Keller Williams Realty of West Monmouth and co-author of "Keep Calm....It's Just Real Estate: Your No Stress Guide to Buying a Home."
David Fisher, president New Jersey Builders Association, said businesses typically picks up again in the warmer months.
"It's to be expected and we just catch up in the spring," Fisher said. "We are seeing many millennials looking for housing opportunities and many are converting from a rental and purchasing their first home. So, the positive news is that whatever starts we may have missed because of bad weather, we'll make up for it when the weather warms up and we expect the demand to be there."
Some realtors in New Jersey are already feeling the demand. Noble-Garland recently had to sell her own home within 60 days because her new home was finished two months early.
"I was able to secure a buyer for my home, but once I was under contract and the sun came out and we had that one week of nice weather, I got seven additional offers," she said. "For sellers who have been sitting on the fence because the thought of putting their home on the market is just overwhelming, now is definitely the time. The spring market is just starting and there are so many buyers out there, there are just not enough homes to go around."
The supply of great homes has been unusually low, but the demand is there. There is no shortage of buyers, but there is a shortage of great homes on the market.
"If you have a house that is priced right, is in decent shape and is in the right neighborhood, you can almost name your price," Noble-Garland said.