With the demand for homes so intense that bidding battles, cash and above-listing-price contracts, sealed within a record-low number of days, are the norm now [1], Realtor.com's data team examined [2] which areas could potentially benefit most—and where homebuyers might "get some relief"— by way of new home construction.
Much of the new construction is happening in the South and the West, places with growing populations due to strong economies, jobs market, and sometimes a lower cost of living. Popular areas for new construction also tend to have looser construction and zoning laws, according to Realtor.com's data journalist Elena Cox.
"Builders are looking to grow wherever they can right now," Rick Palacios Jr., an analyst with John Burns Real Estate Consulting, told Realtor.com. "COVID has ignited demand in markets where there wasn’t really a lot of demand before."
But even increased production is not meeting the "voracious demand for real estate," Cox wrote.
"As the housing market has improved, it's becoming more difficult to secure skilled labor and materials, especially lumber."
In fact, Danushka Nanayakkara‑Skillington, AVP of forecasting and analysis at the National Association of Home Builders, told Cox she does not think builders can keep up with this pace, "simply because of the supply-side issues."
Realtor.com's researchers determined the metros in which builders have filed the most permits to put up single-family homes, condos and co-ops, apartments, townhouses, and duplexes.
The team says it limited its list to one metro per state to ensure geographic diversity.
Here's what they came up with:
No. 1—Dallas, TX, where the median list price is $373,267; the number of permits is 11,636, and the one-year change in permits is 23%.
No. 2—New York, NY, with a median list price of $629,500; the number of new permits is 9,097; and the one-year change in permits is 2%.
"The suburbs are clearly having their day," New York City–based real estate appraiser Jonathan Miller told Realtor.com. He's seeing more construction outside of the city than within it these days.
No. 3—Phoenix, Arizona, where the median list price is $469,500; number of permits is 8,614, and one-year change in permits is 9%.
Phoenix has long been a haven for retirees, but the expansion has grown beyond Phoenix, researchers wrote.
No. 4—Washington, D.C., where the median list price is $499,900, the number of permits is 5,795, and the one-year change in permits is 30%.
No. 5—Atlanta, Georgia, where the median list price is $377,500, number of permits is 5,721, and the one-year change in permits is 1%.
The full list and methodology are available at Realtor.com. [2]