Changes in New Construction

Housing starts in new construction have always been a leading indicator of what is happening in the housing market. It can be a real roller coaster for builders. So I thought it would be interesting to compile some information that allows you to easily see what has happened to new construction in Lake Oswego in the years 2006-2011.

Here is a summary:

Year # Houses Sold Low Price High Price Average Price Square feet
2006 30 $449,900 $1,980,000 $1,068,000 3,743
2007 33 $825,000 $2,610,000 $1,435,000 4,450
2008 11 $670,000 $1,815,000 $990,000 3,746
2009 11 $519,000 $2,025,000 $1,002,000 3,623
2010 13 $510,000 $1,115,000 $697,000 3,635
2011 18 to date $375,000 $959,000 $683,000 3,131
2011 Pending 13 $379,900 $1,199,000 $619,800 3,071
Active 39 $379,950 $3,400,000 $662,000 2,924

It’s pretty incredible to see how heady things got in 2007. In just one year the average sales price went up from $1,068,000 to $1,435,000. And the size of the houses being built went from an average of 3743 square feet to 4450 square feet. I remember seeing million dollar mansions being built and sold as spec houses on Southshore! I have always been able to appreciate a big, gorgeous new house at top dollar if it also has a nice location and setting, but on a busy street? Even then it seemed crazy to me. But there is so little undeveloped land in Lake Oswego that the buyers were willing to buy on a busy street. The demand for large, luxury homes was that high.

Then the economy turned. Very few homes were built and sold 2008-2010.

What got me to thinking about writing on this topic is that I have been seeing quite a lot more new construction. The builders have learned and adapted to the economy. I was surprised to see that the average size of a new home is still right around 3000 square feet. So they are smaller, especially when compared to the 4450 average size in 2007, but 3000 square feet is still a good sized house. The big change is in the pricing. Averages prices of 2011 solds, pending sales and active listings are all in the $600,000’s. There are 18 closed sales year to date but 13 in escrow. With escrow times running 45-60 days, it’s fair to say that most of the pending sales will close by the end of the year. So we could potentially see new construction sales up around 30 for the year, which is where they were before the recession.

I think this is a time of opportunity in Lake Oswego housing. There are 13 brand new homes for sale in LO right now that are priced under $500,000.

Please let us know if you want further information. Linda and I would love to be of help.