There is an enormous amount of breaking news on housing leading us into an economic recovery. In our own town, with and plans to develop an athletic field at the old site of , new construction is on my mind.
As a and resident of Concord, I am constantly analyzing the ongoing developments in Concord’s residential real estate community. I studied Concord’s new construction market back to 2007, which proved to be a recalibration year for our town’s housing market.
Concord, MA New Construction
AVG. SALE $/FT2
*Single Family Homes
-Larger developments are able to charge a lower price per square foot in comparison to tear down development. This affects the overall average in price per square foot in the Concord market.
My research shows that the ratio of new construction homes built to those sold remained relatively constant after 2007. Yet, the average price per square foot continued to decrease. The average price per square foot of $303/ft2 demonstrates that builders are able to acquire land at adjusted market value and sell to meet buyer demand. A caveat to this notion is that some neighborhoods will continue to trend above average value. In the past five years, the Southfield neighborhood averaged $327/ft2 with an upward trend; the Independence and Ridge neighborhoods averaged $380/ft2.
Note that 11 new construction homes were built and 14 were sold in Concord in 2011. These increasing sales directly correspond to the published National Association of Home Builders/Wells Fargo sentiment gauge, which indicates builder confidence in relation to their perception of single family new construction sales. To provide context, from 2001-2006 the sentiment gauge averaged 54. As a result of the economic downturn, the numbers dramatically decreased to 8 in the beginning of 2009. This February, the national gauge reached 29 from January’s 25, exceeding expectations and continuing to move in the right direction.
I expect, after analyzing Concord’s new construction market in relation to the national sentiment gauge, that national sentiment will continue to rise in 2012, in turn increasing new construction production and hopefully buyer saturation. I believe that 2012 will also be a pivotal year in Greater Boston for determining consumer confidence as new construction production is projected to increase.
I’ve enjoyed sharing my thoughts and insights and hope to continue to be of service to the blog. Please feel free to contact me with any questions or comments. Have a great winter’s day.