June May Have Seen the Highest Number of New Home Sales Since 2005, Research Firm Says
The pandemic has caused a major shift in not just how we live, but where we live. In coronavirus hot spots like New York City, thousands emptied out. The New York Times reported there were 81,000 mail-forwarding requests from New York City residents in April. Close to two-thirds of those requests were for destinations outside the city.
The NYT looked into where these folks had escaped to. A majority had left for nearby areas in Long Island, New Jersey and upstate New York. However, New Yorkers whereabouts were pegged all across the country. Other cities saw similar shifts in their populations, as discussed in a podcast titled People Are Panic Moving.
It was unknown whether former city-dwellers would return to their neighborhood when it started to reopen. However, new data from homebuilding companies suggest that folks who left are starting new lives elsewhere, in freshly-built houses far from the city.
While the official government count is not out yet, U.S. real estate research firm John Burns Real Estate Consulting (JBRC) revealed in a survey that sales of newly built homes had jumped 55% in the month of June, according to CNBC. Once confirmed, this spike would be the largest growth the market has experienced since the height of the U.S.’s housing bubble. During this time, real estate prices skyrocketed fueling "extraordinary behavior," as NPR writes, noting that home sales nearly doubled between 2000 to 2005.
According to JBRC, there was an 86% jump in sales of new homes in the Northeast, followed by an 84% increase in new homes in Florida.
"I believe a lot of computer-oriented people have proven to their co-workers that they can be productive from home, and have sensed, or officially been given the green light, to work from home at least a significant portion of the time after a vaccine has been found," John Burns, founder and CEO of JBRC, says of the current uptick in new home purchases. He notes that a majority of these new homes are located in "distant commuter areas."
In particular, Arizona-based builder Taylor Morrison told CNBC that it had seen a 94% jump year over year in June home sales. Clients were asking for high-tech homes, as well as homes with rooms that could be used for working and homeschooling.
"There is a bias to new. When I look at the research that our teams have been doing over the last 12 to 14 weeks, people are quoting, they want new, fresh, a place where wellness features will really make sense for them," Sheryl Palmer, CEO of Taylor Morrison said in an interview on CNBC’s Closing Bell.
The fact that mortgages are at a record low during this time may also be contributing to the boom. Although, the main reason behind these record sales seems to be from the pandemic.
In a JROC survey that ran from June 5 to 9, 5000 respondents were asked why they purchased a home in the last two months. 69% cited COVID-19 as their main reason while 31% had already planned to buy a home prior to the outbreak. This shows how powerful of an impact this public health crisis has had on people's living arrangements.
But as CNBC notes, while COVID-19 inspired folks to pack up and find a new home, if a second wave of the virus triggers another economic shutdown, adding to the unemployment rate, this market growth may be short-lived.
Follow House Beautiful on Instagram.
You Might Also Like
