The Economics of New Home Construction in Raleigh
New construction listings are popping up all over the Triangle, and so far in 2020 the city of Raleigh has already surpassed the amount of new construction listings from the previous year. In 2019, there were 766 single family, detached new construction listings closed in the city of Raleigh. Through 8 months in 2020, there have been a total of 1,031 listings in the MLS, of which 486 have closed.
This hot new-build market has been great for builders and real estate agents alike and is helping provide areas of stability in an otherwise unpredictable economy. For real estate investors, new construction of single family, detached homes in Raleigh has been lucrative to say the least. The average sale price for a newly constructed detached home in Raleigh this year is $609,002. Sales of newly-built Raleigh homes has reached $296 million so far in 2020, putting the new construction market on track to surpass last year which topped $450 million!
FUN FACT: The most expensive single family, detached, new construction property in Raleigh this year was sold for $2,907,502.
Here's how new construction breaks down in Raleigh by ZIP Code:
Why is new construction good for Raleigh, NC?
The Raleigh real estate market is seeing an influx of inventory this quarter, and new construction projects have contributed to that growth. So far in 2020, the city of oaks has seen a 34% increase in new construction listings compared to all of 2019. Adding more projects with high value places large amounts of capital into a more stable real estate market. Investors and homebuyers have been injecting lots of cash into the new construction market in town, creating more desirable housing and raising property values. In 2018, the U.S. spent $1.29 trillion on construction of all kinds. Nationally, new residential construction was at a five-year high in late 2019 before a large drop in early 2020, presumably due to COVID-19.
Besides the obvious advantages of achieving personal financial goals, the residential construction industry is responsible for dozens of jobs, and the amount of individuals involved in one singular new home build might shock you. More than 100 people are involved in the process along the way! As of 2018, 11.2 million people worked in the construction industry - which does not even include all other facets of new home construction.
Who's involved in new home construction projects?
From before the ground is broken on a new home build, until the minute its new owners cross that threshold for the very first time, there are quite literally more than a hundred different people involved in its construction. Here's who has a hand in each new home!
Land clearing contractors
Land grading contractors
Demolition crews (if tearing down old structure)
Site plan engineer
Site plan surveyor
Rental equipment staff
Flooring experts + crew
Dry-wall experts + crew
Special insurance agents
Window installation crew
HVAC installation crew
Real Estate Brokers
When all is said and done, the land has been cleared, the designs have been sketched, turned into renderings and submitted, plans have been approved, crews have moved earth, dug holes and made foundations, constructed amazing architectural masterpieces, painted, finished and landscaped the homes, the whole project financed and insured and sold with help from attorneys and brokers - the home has undergone a massive amount of work from a huge work force.
The process of new construction can be daunting, but with the right guidance, you can understand why these amazing new projects are changing the landscape of Raleigh real estate and helping to stabilize our economy even through a global pandemic.
To work with an experienced broker who understands the Raleigh real estate market and what to look for with new construction, contact Rich Realty Group today.