The current market trend in the new-home sales industry has shown tremendous growth and resilience, as per the latest Zonda report. Incentives and discounts offered by builders have fueled this impressive surge. The data analysis reveals that most top markets have experienced a significant rebound, surpassing 2019 sales figures. As a business owner or a potential home buyer, it is essential to take note of these key highlights and leverage current market conditions to make informed decisions.
According to Zonda’s New Home Market Update, new-home sales have made a strong comeback, driven by incentives and discounts. In fact, national sales have exceeded 2019 levels, and this trend is evident in most top markets as well. Zonda’s data for July reveals a staggering 26% increase in sales compared to the same month in 2019. Prices are also rising in select communities.
Ali Wolf, the chief economist at Zonda, states that the current scenario is quite different from a year ago. Back then, the market was inundated with quick move-ins, buyers were hesitant to move, and builders struggled to stimulate demand. Today, the situation has changed significantly, with home-buying activity returning to healthier levels. Although the market still poses certain challenges, builders have captured more than their historical share of buyers.
Zonda, a leading provider of data and analytics for the home building industry, recently released its updated home sales metrics for July. According to their report, there were 708,201 new homes sold at a seasonally adjusted annualized rate, which is a decline of 0.6% from the previous month but an increase of 34.3% from the same period last year.
It is worth noting that Zonda’s new-home sales metric considers both cancellations and seasonality, providing a more accurate picture of the homebuilding industry’s performance. On a non-seasonally adjusted basis, the number of newly sold homes was 59,836, which is 36.4% higher than last year and 12.3% above the same month in 2019.
In addition to their new-home sales metric, Zonda also created a New Home Pending Sales Index (PSI) to account for supply fluctuations. According to their report, some of the weakest markets in 2022 post the largest year-over-year gains. The July PSI came in at 142.0, representing a 36.9% increase from 2022. While 18.5% below cycle highs, the index increased 0.2%.
Overall, Zonda’s data suggests that the homebuilding industry performs well despite market fluctuations. Homebuyers are still in strong demand for new homes, and even weaker markets see significant year-over-year gains. This is certainly good news for the industry and those looking to invest in the housing market.
The real estate market in Sacramento, California, San Francisco, and Phoenix has bounced back impressively, with increases of 144.5%, 107.7%, and 104.5%, respectively. Zonda reports that last year’s low levels are driving the large increases. Denver, Minneapolis, and Phoenix were the best-performing markets monthly.
Among the selected Zonda markets, Salt Lake City was the only one to post a year-over-year decrease of -17.4%. Jacksonville, Florida, and New York were the other worst-performing metros, but they still maintained positive numbers at 5.2% and 15.7%, respectively.
National home prices have slightly increased year over year across all products, including entry-level at 0.2% for $339,417, higher-end homes at 0.4% for $526,766, and high-end homes at 3.8% for $913,491. According to Zonda, 44% of builders reported raising prices in July, and 51% reported holding prices flat. This contrasts with the end of last year when around 50% of builders lowered prices, and 50% held prices the same.
According to Zonda’s latest report, there has been a slight decrease of 0.6% from 2022 in actively selling communities, totaling 13,810. The national figure dipped by 2% month over month, and the total community count is now 28.4% lower than in the same month in 2019. However, the lack of competition from other new-home communities has led to some upward pressure on the average sales rate per month per community, which is a positive sign. Zonda defines a community as anywhere with five or more units for sale.
The cities that saw the most growth in community counts year over year are Austin, Texas (+14.9%), Riverside/San Bernardino, California (+11.1%), and Minneapolis (+8.1%). On the other hand, community counts fell the most in Tampa, Florida (-18.7%), San Francisco (-12.9%), and Seattle (-12.9%). It is worth noting that community counts in all select markets dropped year over year.
National quick move-ins (QMIs) saw a 1.5% increase last year but a 4.1% decrease month over month, with 25,364 QMIs. Total QMIs are now 55.9% above 2019 levels. Zonda reports that QMIs are selling out faster than they can be replaced in many markets since consumers see these homes as a valuable alternative to the resale market, given the supply. These figures indicate that the real estate industry is experiencing significant changes, and monitoring the market carefully is essential to making informed decisions.
The latest report from Zonda reveals that select markets have experienced a significant increase in QMI count year over year. Los Angeles/Orange County, Phoenix, and Denver lead the metros with 40.8%, 30.6%, and 25.1% increases, respectively. Furthermore, Jacksonville, Las Vegas, and Salt Lake City have seen the most QMI growth compared to July 2019. This is due to an impressive 174.8%, 164.0%, and 117.6% increase, respectively. However, Atlanta, Seattle, and Baltimore are down the most compared to 2019, with a decline of 58%, 57%, and 53% in QMIs, correspondingly. These insights are critical to helping businesses make informed decisions.