This newsletter will go into detail about the New Construction statistics which has recently been added to the MAPropertiesOnline statistics page under the menu item 'New Home Analysis', and how you can use this data to understand the dynamics of new construction, and the general price points of new construction in a town.
Often when helping buyers search for a home I often get asked the question 'What about new construction?'. Massachusetts has some very old housing stock, and often buyers who are relocating and coming from states where there is a lot more 'newer' housing stock, wonder about where they can buy new construction. These types of questions raised the need for some statistics on New Construction, so here they are!
One of the first questions that needs to be answered by buyers who are looking to buy new construction in a town is whether it is even feasible for them to be looking in this town given the money they have to spend. This is easier to show in real-life examples of data. For instance, if a buyer who has around $800,000 to spend is looking to buy in Lexington then reviewing the following graph will show them that this is just not feasible given the price ranges of new construction over the last 12 months in this town.
When reviewing the graph above you can see that in the last 12 months, the distribution of sales of new construction show that there have been no homes sold for under the $1M mark - so, to look for new construction in the $800K range is just not realistic. But, looking at the data for other towns buyers can begin to identify towns where their desire for new construction at around $800K might be more realistic. For example, reviewing the same data for Westford, below, shows that it is entirely possible to find new construction at the desired price point, and is in fact the most common price point for new construction in that town.
The next question that is often raised is 'What size new construction can I expect for my money?'. To answer this we can go to the second piece of statistical information available for new construction. We can see in the following graph that if you had $1M to spend on new construction in Lexington, you will be more than likely buying a home in the 2000-3000 sq ft price range, but closer to the smaller size of this range.
If we review the data for Westford, below, we can see that if you had $1M to spend on new construction then you would be more than likely be buying a home between 3000-4000 sq ft, but closer to the 4000 sq ft mark. This shows a marked difference in living area size, for the same money, if you are comparing Lexington new construction to Westford new construction.
Or the question might be raised slightly differently. A buyer might 'need' a 4000+ sq ft new construction home and might want to know how much this new construction home might cost them in various towns. Reviewing the data below shows that, for Lexington, the average price per sq ft at the 4000 sq ft size is $332 per sq ft, you are probably looking at spending close to $1,328,000 to buy a home of the desired size.
Conversely, for Westford the data shows us the average price per sq ft at 4000 sq ft is $255, equating to a $1,020,000 spend. This shows us that for the same size, new construction home, you would expect to pay approximately $300,000 more to buy in Lexington than for a similar size home in Westford. This sort of data allows buyers to make an informed decision based on their priorities in their living situation - do they want to spend more money to be closer in to Boston in a good school system, or do they want the bigger home, still with a good school system, a little further out from Boston and thus longer commute.
The data also shows us how many homes are new construction within a certain town. If you were wanting new construction, at any price, in a town then how likely is it that some new construction will come on the market? For instance, if you review the graph below then you will see that if you are looking for new construction in Belmont you may be waiting for a very long time with only 4 new construction homes sold there in the last 12 months.
If you would like an estimate of what your home would sell for in today's market I would be more than happy to come by, have a look at your home, and then provide a CMA (comparative market analysis) which will provide you with an estimate of what your home should sell for, along with a marketing plan to get maximum exposure for your home.
If you'd like to chat more about the topic presented here, or the Real Estate market in general, then please call me on (617) 997 9145, or email me at Dani.Fleming@MAPropertiesOnline.com.