October 2019

10 reasons why most residential home sales are resales

See what the ratio is in your market.

Number new and resale home sales by region
State New Home Sales Resale Home Sales Approx. Ratio New to Resale
National 42,639 418,750 1:10
Alabama 567 7,539 1:13
Alaska 40 930 1:23
Arizona 1,962 15,542 1:8
Arkansas 407 3,989 1:10
California 2,477 35,157 1:14
Colorado 1,723 10,409 1:6
Connecticut 50 3,596 1:72
Delaware 233 1,283 1:6
District of Columbia 26 855 1:33
Florida 5,893 46,410 1:8
Georgia 1,854 13,488 1:7
Hawaii 38 382 1:10
Idaho 617 3,921 1:6
Illinois 430 14,345 1:33
Indiana 600 9,712 1:16
Iowa 288 4,196 1:15
Kansas 208 3,238 1:16
Kentucky 285 5,353 1:19
Louisiana 530 4,738 1:9
Maine 31 1,260 1:41
Maryland 725 7,059 1:10
Massachusetts 137 7,508 1:55
Michigan 581 11,078 1:19
Minnesota 546 6,963 1:13
Mississippi 47 955 1:20
Missouri 433 8,703 1:20
Montana 72 1,522 1:21
Nebraska 209 1,949 1:9
Nevada 952 5,530 1:6
New Hampshire 47 1,488 1:32
New Jersey 370 8,011 1:22
New Mexico 202 2,712 1:13
New York 389 10,784 1:28
North Carolina 2,612 16,826 1:6
North Dakota 41 778 1:19
Ohio 702 15,946 1:23
Oklahoma 603 5,869 1:10
Oregon 524 6,032 1:12
Pennsylvania 632 13,006 1:21
Rhode Island 30 1,273 1:42
South Carolina 1,590 8,749 1:6
South Dakota No Data No Data No Data
Tennessee 1,173 11,896 1:10
Texas 8,262 40,086 1:5
Utah 943 5,623 1:6
Vermont No Data 865 No Data
Virginia 876 11,572 1:13
Washington 1,262 11,021 1:9
West Virginia 79 701 1:9
Wisconsin 261 7,044 1:27
Wyoming 44 774 1:18

Prior to the Great Recession that began in December 2007, new homes accounted for approximately 1 in 6 home sales.1 The housing bubble burst led to a drop in new construction sales to around 1 in 10 home sales,1 which has maintained a stubborn steadiness ever since.

Variability between purchasing new and existing homes is due to factors such as economic changes in particular regions of the country, availability of land, construction costs, etc. The April 2019 snapshot presented above1 shows new home sales ranging from around 17% of total sales in Texas to just 1.8% in Massachusetts.

On average, 90% of homes sold in the U.S. are resales.1

Showing your customers new construction has its obvious advantages — new appliances, low maintenance, up-to-date technologies and the ability to customize a home — but why, given these benefits, is the market virtually fixed with around 90% of home sales being resales?

10 reasons why homebuyers choose existing homes:

  1. Greater inventory to choose from, so more options in terms of home style, size, layout, architectural detail, location and price
  2. Less expensive, with the median price of an existing home costing nearly $100k less ($225k vs. $324k)1
  3. Appeal of moving into an established, tree-lined neighborhood with schools, shopping, entertainment and parks nearby
  4. Smaller down payments — with 20% down, a buyer would have to save nearly $20k less
  5. Negotiability of purchase price, given that a buyer negotiates with the homeowner, rather than a builder and investor
  6. Constructed from more desirable materials, from hardwood floors and solid doors to stone or brick exteriors
  7. Earlier availability, compared to moving into a new home months after touring a model unit
  8. More for their money — an existing 2,000 sq. ft. home, based on current median pricing, costs $49 less per square foot than new construction
  9. Ability to purchase a lower-cost fixer upper, where imagination and sweat equity eventually account for much of a home's individuality and value
  10. Opportunity to own a larger lot

Even when working with clients who favor new construction, it may be worth expanding their options by helping them explore the distinctive benefits of existing homes.

1Source data: CoreLogic®

Data date: 7/9/2019

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