Many homeowners paused their plans to sell during the height of the pandemic, but this isn’t the main cause of today’s housing shortage and the huge gap between supply and demand. Sam Khater, Vice President and Chief Economist at Freddie Mac, Economic Housing and Research Division, shares:
“The main driver of the housing shortfall has been the long-term decline in the construction of single-family homes . . . That decline has resulted in the decrease in supply of entry-level single-family homes or ’starter homes.’”
Entry-level homes are typically suited for first-time homebuyers. And on a national level, first-time homebuyers represented 46% of new single-family purchase loans in 2020.
In our local area, first-time homebuyers are finding it very difficult and pricey to purchase a single-family home. Not only because of the sheer competitiveness of trying to “win” a multiple offer bidding war, but also because the new median sales price of a single family home in Santa Clara County has now reached $1.67 million and the new median sales price of condominiums and townhomes is now $900,000.
Will new home construction help first-time homebuyers? In some respects, yes. New homes in our area still come at price tags starting around $1 million, but the larger appeal is that there’s a price sheet. Meaning, the price is fixed – no bidding wars or paying over the asking price – which is a welcome relief!
Two new home local construction developments are “Bellaterra” (pictured above) and “Montalvo Oaks”. These are beautiful homes with Los Gatos and Saratoga schools, respectively. Both developments are being built by Summerhill Homes, with Bellaterra delivering 253 new homes in the next several years in the “north 40” area of Los Gatos on Lark Ave. These condominium and townhouse styled homes, range in price from $1.2 million to $2.2 million. For that price you’ll get super sleek, modern styling with high ceilings, high-end finishes, and open floor plans of approximately 1000-2000 square feet.
If a new home is on your radar, please reach out as the purchase process is a bit different from that of a “used” home!