5 Cities are Driving the Surge in Housing Values
During the past year home prices surged by 13.4% to an aggregate value of $33.4 trillion, from February 2020 to February 2021. This was largely due to an acceleration of demographic trends from Covid-19. According to Redfin, the large surge pricing was largely driven by five cities – Jacksonville, Austin, Charlotte, Phoenix and Sacramento. “A lot of cash buyers are coming to Jacksonville from big cities like LA to take advantage of lower taxes, and they’re offering sellers well over their asking prices,” said local Redfin real estate agent Heather Kruayai in a prepared statement. A predominance of homebuyers in these “hot markets” are from households looking to move into those cities. Consequently, business formation in Texas increased 66% year over year. The migration trends are positively impacting these areas.
Multifamily Developers Vexed By Increasing Material Costs And Construction Delays, NMHC Finds
The national Multifamily Housing Council (NMHC) found that about three-quarters of multifamily developers are experiencing delays in constructing new projects. This is based on a recent survey conducted by the NMHC. Additionally, the survey found that most of the delays were due to either Covid-19 and lack of building materials. At the start of the Covid-19 health crisis, a surge in demand for residential properties caused an increase in demand for developments, which, in turn, caused a spike in the cost of materials. A lack of labor is an additional issue the report found. Due to various lockdowns and uncertainty, developers have had a difficult time finding construction workers.