Savannah's New Construction Boom: What You Need to Know Before You Buy

You may have noticed an uptick in construction and newly built homes around Savannah. This isn't just a local trend—about one-third of single-family homes for sale today are newly constructed, a big leap from pre-pandemic times.

So, why are new construction homes booming, and what should you consider if you're thinking of buying one? Let's dive in!

The Rise of New Construction Homes

Since 2019, the real estate market has seen a significant shift. The rise of remote work, historically low mortgage rates, and increased demand for homes have led builders to ramp up construction. Even though demand has cooled a bit and mortgage rates have risen, new builds remain a crucial part of the housing market. Nationally, newly built homes made up 33.4% of the market in Q1 2024, according to Redfin.

Why New Construction Homes Are in High Demand

Limited Supply of Existing Homes

Builders are churning out about 1 million single-family homes a year, but many homeowners are hesitant to sell due to high mortgage rates. As Robert Dietz from the National Association of Home Builders (NAHB) puts it, “The level of resale inventory has shrunk.” With fewer existing homes available, new construction is filling the gap. Buyers today are exploring all their options, from fixer-uppers to renovated properties to brand-new homes.

Attractive Pricing and Incentives

Builders are motivated to sell their inventory and are often more flexible with pricing than individual home sellers. To attract buyers, they frequently offer incentives like mortgage rate buy-downs, price cuts, and covering closing costs. Plus, new homes are becoming more competitively priced. According to the U.S. Census Bureau, the median sale price for new houses in March was $430,700, only 4% higher than existing homes—a much smaller gap than pre-pandemic times when new homes were over 40% more expensive.

Matthew Walsh, assistant director and economist at Moody’s Analytics, told CNBC, “Prices are much closer to parity than during any point in the last three decades.”

What Does This Mean for You as a Buyer?

Some buyers might think newly built homes are too pricey or a hassle, but they come with unique advantages:

• Flexible Pricing: Builders might be more open to negotiating on price, offering concessions, or even including upgrades as incentives.
• Modern Features and Energy Efficiency: New homes are built to the latest codes and often come with features that can save you money on utilities.
• Less Maintenance: Brand new homes don’t need immediate repairs or renovations, so you can move in and enjoy your new space right away!

Things to Consider Before You Buy

While new construction homes have great benefits, there are some things to keep in mind:

• Wait Times: New construction homes might not be move-in ready. Depending on the stage of construction, you might have to wait several months before closing.
• Limited Space: Builders have been making smaller homes to keep costs down. According to the NAHB, the median new single-family home was 2,156 square feet in Q4 2023, the lowest reading since 2010.
• Future Costs: Property taxes on new builds can increase significantly after the first year, so make sure to factor this into your budget.

Local Market Insights

Here in Savannah, new construction is buzzing. From developments in Pooler to expansions in Richmond Hill, there's a lot of new housing activity. These areas are offering modern amenities and community-centric designs, making them attractive to families and professionals alike.

Final Thoughts

With one-third of the market consisting of new builds, there are plenty of opportunities to find a home that suits your needs. While there are unique considerations when buying new construction, the benefits often outweigh the challenges. From modern amenities and energy efficiency to customization options and attractive incentives, a newly built home could be the perfect fit for your next move.

Looking to explore your options in Savannah? Give me a shout, and let's find your dream home together!