ST. LOUIS — At the onset of the COVID-19 pandemic, McKelvey Homes President Jim Brennan wasn’t sure what was ahead for his company.
“Back in February and March, we didn’t know what to expect. There was so much uncertainty,” said Brennan.
But for the homebuilding industry, both in St. Louis and nationwide, what was initially a period of uncertainty has become a time of growth.
Through September, the St. Louis region had 4,265 single-family home starts, according to data from the U.S. Census Bureau. That total marks an 8% increase year over year. The Census Bureau reported that housing starts in September were on a pace to reach a seasonally adjusted annual rate of 1.42 million. That the highest pace of single-family home starts since June 2007, according to the National Association of Home Builders.
“From the beginning of COVID, housing was deemed as an essential business. People recognize the importance of a new home. Today, your home is not only your home, but it is your office, your school, your restaurant, your gym, etc,” said McBride Homes Chairman and CEO John Eilermann Jr. “Historically low interest rates have also contributed to the demand.”
Brennan and Eilermann also said demand is being impacted by a low supply of existing homes for sale in the St. Louis market. Total inventory of existing homes for sale locally is down 39.1% year over year, according to the latest data from real estate website Zillow. That’s created a market where existing homes are selling fast and, in many cases, are receiving multiple offers due to a limited amount of properties on the market.
Because of increased demand for new homes, Eilermann said McBride will close on 900 homes in 2020 compared 783 in the prior year. McBride has 2019 revenue of $244 million.
St. Charles County leads the region in new home construction. According to the latest figures from the Home Builders Association of St. Louis & Eastern Missouri, 1,210 single family home permits were issued in St. Charles County through August, compared to 1,143 in 2019. St. Louis County had 518 single-family permits issued in the same time period, up from 492 from a year ago.
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