Oct 29, 2021
How the Pandemic Is Impacting the Spec Home Marketplace
The pandemic has drastically changed the construction industry, and with it the real estate landscape. The demand for labor is high, construction supplies are in a shortage, and home prices are skyrocketing. Spec homes are not immune to this turbulence, but there are benefits to having a spec home during this time. Here are the ways that recent factors have impacted the spec home market for better and for worse.
Those Already in Spec Homes Don’t Have To Worry
Those who invested in a spec home prior to the pandemic and are currently enjoying their life in it, are reaping a variety of benefits. Their homes came with brand new appliances and features, making it less of a struggle to find materials for furnishing in this shortage. Traditional homeowners who were in the middle of renovations on their homes are now struggling to find appliances and building materials to complete their project due to the supply chain restrictions and tightening. This puts spec home owners ahead of the curve in this regard.
Competition Is Fierce
Due to the pandemic, people from all different areas are migrating to other states. With work from home flexibility and shifting lifestyle priorities, many went for greener pastures. According to U-Haul’s annual trends migration report, Arizona was one of the top five states that experienced strong migration growth during 2020. We saw this in the form of increased housing, as the bottleneck raised the home and rent prices here and across the U.S.. Spec homes are been impacted by this competition for the building and purchase of these properties, but since they aren’t as saturated on the market as traditional homes, home owners have an advantage, as they are more accessible. The prices of homes have also increased dramatically, making many of them not as affordable to the average buyer, and spec homes are not immune to this.
Labor Has Slowed or Stopped Completely
For those who are waiting for a spec home that is still being built for them, labor has slowed drastically. In Phoenix, the labor market hasn’t been hit as hard as some other states, according to CareerCloud’s Labor Shortage Impact Across America October report. Arizona came in as the 8th state on a list of average job openings per unemployed person at .56. Compared to some other states, like the District of Columbia that had 2.37, this is a much less dramatic labor shortage. When there is a labor shortage, it takes longer for a home to be built. While spec homes are feeling the labor shortage pinch too, the ones that are already built at least won’t feel the impact as much as traditional homeowners who are waiting for repairs on their house since spec homes already come with amenities. For those that are still waiting on their spec home to be built, the waiting list is the same as everywhere else.
REA Scoop is a desktop and mobile app for realtors and homeowners dedicated to new build and spec homes in Arizona. Realtors can search for available spec homes on the market and homebuyers can find a move-in ready home. For more information, contact us today or download the app on Google Play or the App Store.