Tuesday, August 16

New York, New Jersey and Pennsylvania are Home to the Most Expensive New Houses in the U.S.

If you’re interested in building or buying a new home, consider yourself lucky if you don’t live in the Northeastern United States: new research from the National Association of Home Builders shows that median home prices on the Atlantic Coast are 52% higher than the U.S. average. And while the NAHB reports that this difference is due to more expensive tastes and high local labor costs, the research shows exactly how disparate the country’s new home construction market has become as the economy continues to recover.

By analyzing government data on speculatively-built homes–or residences constructed on a builder’s land, which are sold in one deal with the property — the NAHB found the median sales price of a single-family home in the U.S. to be around $86 per square foot. In contrast, the Middle Atlantic region of the country averaged around $131 per square foot in 2013. The area, which includes New York, New Jersey and Pennsylvania, has reportedly seen a surge in high-quality features, such as ceramic flooring and other accessories, which has increased building costs. Additionally, higher rates for construction workers’ wages and other factors help to make building a new home significantly more expensive.

In contrast, the NAHB’s research shows that the country’s least expensive “spec” homes are found in the West South Central region, which includes Arkansas, Oklahoma, Texas and Louisiana. New homes in this area reportedly cost an average of $73 per square foot, reflecting different style trends and labor prices. The rest of the nation falls somewhere between these two extremes in new home prices, ranging from around $100 per square foot for most of the West, and prices in the 70s and 80s for most of the Southeast.

However, the NAHB’s data shows that these prices change somewhat when it comes to custom homes, or houses built on an owner’s land, which are typically more expensive than “spec” homes. While the most expensive custom homes were once again on the coasts, this time the Pacific region came out on top, with an average of $145 per square foot. The New England region came in a close second with $143 per square foot. The cheapest area was the East South Central region, which consists of Wisconsin, Michigan, Illinois, Indiana and Ohio.

“The Oklahoma new home market might be the country’s best kept secret,” says Kelsey McGregor of McGregor Homes. “In Oklahoma a custom built dream home can be a reality for middle class Americans.”

The NAHB posited that the difference in prices and the disparity between “spec” and custom homes could be due partially to income rates, but also to the fact that these are vacation areas. Because New England and the Pacific areas have states with greater numbers of vacation homes, they attract new residents who have heard about the area’s reputation and are willing to pay to create better housing during their holidays. However, the association also pointed out that custom homes attract a very specific type of home buyer: ones who are willing to wait longer to move into a new home, especially if it means accessing luxury features and materials.

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