Hopeful homebuyers literally camped out overnight at the Prestwyck Community in McKinney, Texas, on Monday this week, to get first dibs on some dirt in the north Dallas suburbs.
Was there gold in them hills? Hardly. Were there bargains to be had? Not really. First Texas Homes was offering pre-construction lots for houses priced from $310,000 to $390,000 in a town where the median home runs about $350,000. These places weren’t anything out of the ordinary, but buyers were lining up. Why?
Because there aren’t enough houses on the market. North suburban Dallas has a six-week supply of properties for sale. That number is normally twice as high, said Redfin real estate agent Connie Durnal. And economists generally consider the market balanced when there’s a six-month supply. The shortage of homes for sale has led to bidding wars, especially for homes in the $300,000 range, Durnal said.
“If you list a home under $275,000, you’re almost guaranteed to have multiple offers,” Durnal said. Even so, buyers are paying more and getting less. “Buyers feel like they’re giving away the farm on a home where they’d have to redo the kitchen on top of everything else.”
Enter new construction. In a new house, a buyer can customize the details, everything is sparkling and – if you wait in line – you don’t have to outbid anyone. Durnal has had three buyers close on newly constructed homes in the past two weeks.
And yet there’s not enough new construction to go around, especially for the average buyer. Nationwide, single-family home construction is at the same level it was in 1991, according to Robert Dietz, an economist with the National Association of Homebuilders.
In suburban Dallas, they’re feeling it. Developments under $350,000 are hard to find, and those under $300,000 are rare as hens’ teeth. But if they build them, buyers will come.
Thinking about buying a newly constructed home? Check out our 10 tips for getting a better deal when buying new construction.
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