New Home Premiums in Hot, Cold Markets

New analysis of new home infill communities finds that when a housing market is hot, these new detached homes can bring in a 25 percent premium.

In colder markets with limited pricing power and slower sales, the new home premium can be up to 30 percent below normal for detached homes. Writes John Burns Real Estate consultant Pete Reeb, market timing can make a major difference in new home premiums, but community amenities, the age of the housing stock, and types of parking are also major factors in new home premiums.

Builders working on their grand opening prices today or looking at future deals need to pay close attention to today’s market strength. In a hot market, builders can push the new home premium higher than usual. In a cold market, the premium will be less than usual. For the strength of your market, and particularly your submarket, please contact one of our consultants. We work with builders and investors to help them make well-informed decisions regarding the pricing potential of new home projects.

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