BUILDER UPDATE

The construction industry is proceeding forward with an optimistically cautious attitude. Builders and developers put so much on the line in the past couple of years trying to reach the demand for housing, only to have an abrupt change in the economic environment that has transpired in less than two years. However, housing is still way below inventory, and demand continues to be strong for those who can afford down payments or cash to purchase the home outright, which we see often.

From a construction standpoint, the interest rates matter, but it matters most for the first-time home buyer, the entry-level home buyer and the second-home market. The housing market in Milton offers few homes for the entrylevel group due to the existing population and median average household income. The median household income in Milton is 108% higher than the state average. Milton still has a shortage of inventory for prospective buyers looking to move into the community, and buyers that have bought in the community are also looking for new homes.

Many of today’s buyers want space, endless amenities and room to roam when purchasing a home. These perks often include a pool, office and study spaces, finished basements with in-law suites, outdoor living areas, sculleries, smart home technology and more.

Land

There is still a shortage of lots. Prices have subsided slightly, but this decrease is only the market correcting itself from the recent over-valued prices; however, new developments keep popping up.

Lumber

Lumber is down and is currently at its lowest level since June 2020.

Labor

Labor was an issue before the pandemic, but it is improving. Higher salaries have increased the number of workers, but the need for and retention of experienced workers comes at a high cost.

Permits

Building permits are still up from this same time last year. Singlefamily home prices are down, but attached-home prices are up.

Materials Pricing

Concrete prices have increased in 17 of the last 18 months, with concrete pipe up 30%, which is the largest required material for infrastructure; there is also a five- to six-month wait time. Drywall is up 23% from 2021, with a 7.6% increase year-to-date. Steel is twice as high as it was in January 2021 but steadily declines.

Focus on Milton

Milton seems to defy the odds when it comes to housing, its citizens, community, businesses and overall environment from what you would hear and see in the news and media. Milton’s core history and value has withstood this test of time and has only benefited from the pandemic and the transitions in lifestyle and work. Builders continue building, and buyers close on their dream homes. There has been significant growth in population over the past few years in Milton.

Not only are people moving to Milton, but businesses are also moving as well. One hundred thirty-nine new business licenses were issued in the City of Milton in 2022. Those businesses, whether home-based or office based, will need a place to call home as well as housing for their employees. These new enterprises further create the need for housing in Milton.

Milton’s median income is

108% higher than the Georgia average.

Are we in a bubble like 2008?

No. One thing to think about when discussing what we are seeing today versus what the housing industry saw in 2008 and 2009 is the demand. In 08/09, there was an average of 50 homes for every one qualified buyer. Before that, too many homeowners who were not qualifying buyers were given loans that inevitably defaulted.

Currently, in 2022, there are about 50 homebuyers for every one home. Qualifications are much more stringent, and who and how much the banks lend money to are significantly different. If we take into account the interest rate hike and remove half the buyer pool, there is still an average of 25 buyers for every one home. The odds are good, and this levels out the home and land prices to what they should be, creating a healthy but still competitive housing market.

Obviously, this is different for all price points and cities, but looking at Milton, the demand for new homes in the city continues because of the incredible community the citizens of Milton have built.

Contributed by Ken Walick President, Vertical Luxury LLC.