Market share of new home sales in HOAs remains flat for 2016

By Deborah Goonan, Independent American Communities

It’s that time of year again. Below are highlights and analysis of the U.S. Census Survey of Construction statistics (Figures for 2016).

SOURCE: Highlights of Annual 2016 Characteristics of New Housing

A total of 561,000 single-family homes were sold in 2016.

Of all homes sold, 498,000 were detached homes and 63,000 (11%) were attached homes (townhouses).

411,000, or 73%, were in a community with a homeowners’ association. The percent market share of single family home sales in HOAs has remained flat, within the margin of error, since 2012.

18% of all new single family homes sold were located in the Northeast and Midwest, 82% were located in the South and West regions of the U.S. In the Northeast and Midwest regions, 44% and 64% were located in an HOA, respectively. Most new HOA single family homes sold were in the higher growth state in the South (78%) and the West (74%).

In total, detached single-family homes sales (including non-HOA new construction) increased 10% from 2015. But market share for the HOA industry has remained steady since 2012, with 72% of detached single family homes sold located in HOAs.

Attached single family home sales increased by whopping 40% since 2014. However in 2014, 91% of townhouses were HOA homes, and in 2016 only 86% of attached single family homes were in HOAs. (Margin of error 3%)

However, looking at the overall market trends, attached single-family homes appear to be falling out of favor. Leading up the recession of 2008, 15% of new single family homes were attached, but since 2013, only 10-11% of new construction sales were attached single family homes such as townhouses.

The median size of a new single-family home sold was 2,466 square feet.

The median sales price of new single-family homes sold in 2016 was $307,800, while the average sales price was $360,900.

Median price per square foot was $96, average price per square foot was $105, excluding the cost of the lot.

Looking at statistics for new single family homes sales in HOAs, by price range, there are noticeable downward trends in HOA homes sold between $125,000 – $250,000.

Price range $125K-$150K: HOA market share peaked at 68% in 2012, and has dropped to 40% as of 2016.

Price range $150K-$200K: peak of 69% in 2013, dropping to 57% in 2016.

Price range $200K-$250K: peak of 78% in 2015, down to 68% in 2016.

At higher price ranges, market share has barely budged since 2014. Trends for the past three years are as follows:

Price range: $250K- $500K: 79-82% of homes sold were in HOAs

Price range $500K-$750K: 76-78% of homes sold were in HOAs

Price range $750K + : 67-71% of homes sold were in HOAs

The overall price trend indicates that more affordably priced new single family homes are less likely to be governed by an HOA than pricier new homes.

In other words, newly-built single family HOA homes are less affordable to purchase than new non-HOA homes.

Contractor-built homes

The U.S. Census defines”Contractor-Built” houses as “built for owner occupancy on the owner’s land under the supervision of a general contractor.”

116,000 contractor-built single-family homes were started and 108,00 were completed in 2016. Contractor-built homes represented roughly 20% of all new single family homes completed.

The median contract price was $252,000. Median price per square foot was just under $102, roughly 6% higher than the national median sale price for new homes. Contract prices exclude the cost of the lot, normally purchased separately. The calculated median size of a contractor-built home was 2,477 square feet, nearly the same as the median size of all new single-family homes sold in 2016.

Doing the math, $6 x 2,470 square feet = $14, 820, a slightly higher sale price for a contractor-built home. Presumably, the higher price in a contract-built home includes additional custom features, not easily available with tract-built homes.

But here is an interesting fact. Only 25% of contractor-built homes were constructed in an HOA. The relative share of contractor-built homes in HOAs has remained within the margin of error for 6 years straight, since 2011.

In other words, when buyers have the choice, 3 out of 4 consumers will opt against building a home governed by an HOA.

Multifamily new construction in 2016

Of 321,000 multifamily units completed in 2016:

14,000 were age-restricted.

The median size of multifamily units built for rent was 1,085 square feet, while the median of those built for sale was 1,706 square feet.

The vast majority of multifamily housing completed for the past several years has been built for rent. Only 8% of units in multifamily construction were completed for sale as condominiums. (The statistics for 2014 and 2015 – 5% of new units were built for sale.)