New Construction vs. Resale Homes

September 4, 2024: When purchasing a home, one of the biggest decisions buyers face is whether to opt for a new construction or a resale home. This decision often depends on various factors like market trends, inventory availability, and personal preferences. Recent real estate data from across multiple Texas cities shows distinct patterns in the activity, inventory, and sales of new construction homes compared to resale properties. Understanding these patterns can help buyers make informed decisions, whether they’re looking in Austin, Georgetown, or beyond.

In Austin, for example, the market remains competitive. The data reveals that there are 3,588 active resale homes with 787 pending and 2,228 sold, leading to an activity index of 18%. In contrast, the new construction market in Austin has 711 active listings, 195 pending, and 276 homes sold, bringing the activity index for new construction to 21.5%. With a months of inventory figure of 4.83 for resale homes and 7.73 for new construction, it’s clear that there’s more supply in the new construction market compared to resale, which could mean more opportunities for buyers interested in newly built homes.Smaller cities like Buda and Hutto are also experiencing strong demand for new construction. In Buda, there are 100 active new construction homes, 76 pending, and 154 sold, resulting in an impressive activity index of 43.2%. This is significantly higher than the resale activity, which has an index of 21%. Similarly, in Hutto, new construction is booming with a 44% activity index, compared to 25.8% for resale homes. With only 2.15 months of inventory for new construction homes, Hutto is a fast-moving market for those seeking new builds.

Georgetown, another rapidly growing city, demonstrates the differences between resale and new construction as well. For resale homes, the data shows 617 active listings, 173 pending, and 446 sold, giving it a 21.9% activity index and 4.15 months of inventory. New construction, however, is thriving with a 32% activity index, driven by 479 active listings, 225 pending, and 265 homes sold. Despite the higher number of new construction listings, Georgetown still maintains only 5.42 months of inventory, which reflects a relatively balanced market for new builds.

In contrast, areas like Dale and Burnet exhibit higher months of inventory, particularly for new construction homes. For example, Dale has 11.4 months of inventory for resale properties and a whopping 15 months for new construction. Similarly, Burnet shows 7.22 months of inventory for resale homes and 3.8 months for new construction. This means that these markets may be experiencing an oversupply, which could lead to longer wait times for sales to close.

Other notable cities, such as Pflugerville and Jarrell, show a significant difference in market activity between resale and new construction homes. Pflugerville's resale market has a 22.6% activity index, with 319 active homes and 93 pending sales. New construction, on the other hand, shows a robust 45.5% activity index, with only 2.27 months of inventory—making it a prime market for buyers seeking new homes. Jarrell, with its strong new construction activity index of 40.8%, has become a desirable location for those looking to invest in new builds, especially given its low inventory of 1.95 months.

Meanwhile, markets such as Spicewood and Marble Falls paint a different picture. Spicewood's new construction market is slower, with 10.2 months of inventory for resale homes and a massive 18 months for new construction. Marble Falls has similar trends, with 18.23 months of inventory for resale properties and 4.29 months for new construction. These figures suggest that these areas may see slower turnover rates, providing buyers with more time to consider their options.

Throughout these Texas markets, it's evident that new construction homes are more readily available in certain areas, while resale properties may move quicker in others. Whether buyers are considering Austin, Georgetown, or smaller towns like Hutto and Jarrell, the choice between new construction and resale homes often depends on the specific dynamics of each market. Buyers should carefully assess market activity, inventory levels, and the overall availability of homes to make the best decision for their needs.