The Alabama Gulf Coast has been experiencing a historic seller’s market, meaning more people want to buy a home than there are homes available, and the shortage of available homes for sale will likely continue.
We’ve discussed in a previous post how the combination of delayed sales due to COVID-19, historically low interest rates and a rise in the average amount of time between moves have caused the shortage of homes for sale in our area. But what can be done to meet the demand? Put simply, either more people opt to sell their existing homes or more homes need to be built.
Everyone just loves that new home smell.Dan Beasley of Truland Homes
What do the words “new construction” bring to mind? Probably images of pristine houses where no pet has ever soiled the carpet and no spaghetti has ever splattered on the kitchen cabinets. In certain parts of the country, finding a home that pristine is a battle, but along the Gulf Coast, that is thankfully not the case.
Just driving to work or school, you can see the evidence of the Gulf Coast’s new construction boom: flatbed trucks full of bricks, walls being nailed into place or internet and electrical trucks running lines to new homes.
While new construction isn’t for everyone, it’s clear those along Alabama’s Gulf Coast are increasingly seeing its benefits. “Everyone just loves that new home smell,” explains Dan Beasley, director of sales for Bellator Real Estate & Development’s sister company Truland Homes, who has built more than 1,500 new homes along the Gulf Coast and is one of the largest private home builders in the South. “In addition to everything being new, newer homes are more energy efficient, which can save you money on power bills. Our homes are also built to Fortified Gold standards, which qualifies the purchaser for up to a 40 percent discount on their homeowner’s insurance. As always, new construction comes down to customer preference.”
It’s a preference that’s on the rise. Nationally, new home sales jumped 17.3% between December 2019 and December 2020. In the state of Alabama, sales have been increasing steadily since 2008, topping 1,000 in a month in June, July and December 2020, according to data from the Alabama Center for Real Estate (ACRE). That’s a 35.6%, 30.9% and 31.8% year-over-year increase for those months respectively.
In Baldwin County, 2020 saw the best month of new construction sales since 2009 with 229 new homes sold in June, according to ACRE. The percentage of new construction sales has risen from single digit percentages in the mid-2000s to consistently hovering near 20 percent of total sales for the county. ACRE reports average sales prices for new construction homes in Baldwin County have followed the upward growth trend, increasing from the low $200,000s at the beginning of the decade to its highest month yet in August 2020 at $330,063 and falling only slightly in December 2020 to $312,231.
While Mobile may not be experiencing the new construction boom of Baldwin County, the demand for the new homes that are available is on the rise. In December 2020, 46 new construction homes sold in Mobile County with an inventory of only 14 new homes available.
If the numbers are any indication, the trend toward increasing new construction sales along Alabama’s Gulf Coast is one we will likely be seeing for some time to come.