With millennial parents fleeing the big cities in search of more space and a lower cost of living, the pandemic has hastened their desire for single family residences.
In this article, we'll review some of the trends and factors affecting the residential construction market, and the implications for service providers & suppliers to the single family construction space.
For all intents and purposes this is a seller's market. With inventory lacking and COVID-19 continuing to exert additional pressure, expect the demand to increase through the winter, as buyers look towards the busy spring home shopping season.
Sellers could enjoy an anticipated 5% - 6% bump in sales prices as buyer's get increasingly competitive.
Add in current low interest rates and demand should be steady for some time.
Some of the more interesting trends we see are certainly impacted by new stay at home protocols, as families desire hospitable digs to cocoon themselves in for the foreseeable future.
Vendors of kitchen and bath fixtures, granite, lumber, sod, appliances, and outdoor amenities should expect and prepare for increased demands for their services.
As we have seen in recent years, the regions still benefiting the most from the detached single family construction boom tend to be in the lifestyle centers of the south and the west.
Warmer climates mean building can take place year round, and the northerners fleeing snow, ice and higher taxes have further spurred demand.
We track the builders & developers enjoying this spate of increased demand.
Per our project database reporting, the top 20 developers (as of this snapshot in time) by the amount of projects in planning and construction are:
| DR Horton |
| Highland Homes |
| Coventry Homes |
| Perry Homes |
| Drees Homes |
| Chesmar Homes |
| Lennar Corp. |
| Del Webb Construction |
| Shea Homes |
| M/I Homes |
| Pulte Group/Pulte Homes Inc |
| First Texas Homes |
| Sandlin Homes |
| Stonehollow Homes |
| David Weekley Homes |
| KB Homes |
| Ashton Woods Homes |
| Hovnanian Enterprises, Inc. |
| LGI Homes |
Top projects expected to break ground in 2021 include:
Luxury Developments like:
Project: #3205812
| Location: | Sartell, MN 56377 southeast of the Blackberry Ridge Golf Club |
| Details: | Plans call for the construction of a residential development with 22 high-end single-family homes near the Blackberry Ridge Golf Club. |
| Schedule | |
|---|---|
| Stage: | Groundbreaking |
| Construction Start: | 1/2021 |
| Construction End: | 1/2024 |
Market rate developments like:
Project: #3212067
| Location: | Menifee, CA 92596. West of Hilton Rd and Leon Rd. |
| Details: | Plans call for the construction of a 53-lot residential development. |
| Schedule | |
|---|---|
| Stage: | Groundbreaking |
| Construction Start: | Q1/2021 |
| Construction End: | Q3/2022 |
Affordable developments like:
Project: #3215050
| Location: | Bozeman, MT 59715. Bridger Dr and Story Mill Rd. |
| Details: | Plans call for construction of 63 affordable single-family homes. The home lots will be between 1,700 and 3,650 square feet. |
| Schedule | |
|---|---|
| Stage: | Starts in 4-12 months |
| Construction Start: | Q2/2021 |
| Construction End: | Q2/2022 |
Age restricted developments like:
| Location: | Carmel, IN 46033. The northeast corner of 136th Street and Keystone Parkway |
| Details: | Plans call for the construction of a residential development with 149 age-restricted single-family homes. |
| Schedule | |
|---|---|
| Stage: | Starts in 4-12 months |
| Construction Start: | Q3/2021 |
| Construction End: | Q3/2023 |
While demand for single-family detached homes is on the rise, it doesn't meant that all that desire one can handle the down payment or even desire a mortgage.
Exploiting this trend is the built-for-rent niche, with developers preferring the promise of long term cash flow over one-off deals.
While millennials make up a good portion of the early adopters for this very new market niche, young singles and empty nesters also see value in the flexibility of a mortgage-free lifestyle.
Given the perfect storm of market conditions: low interest rates, sky-high demand and product diversity, builders,developers and suppliers to the single-family construction space could have a breakout year in 2021.
To stay on top of new business development opportunities and to increase your total project awareness, consider a free trial to SingleFamilyData, your new source for accurate detached single-family construction leads and analytics.