The housing market has been one of the few economic success stories during the Covid-19 pandemic.
According to the most recent data released by the National Association of Realtors (NAR), existing home sales grew for the fourth consecutive month in September to a seasonally adjusted annual rate of 6.54 million, a 9.4% increase from the previous month and a nearly 21% spike from one year earlier. More than 7 in 10 homes that sold in September were on the market for less than one month.
However, buyer demand continues to run far ahead of available supply. NAR reported that September”™s housing inventory totaled 1.47 million units, down 1.3% from August and down 19.2% from one year earlier. Unsold inventory sits at a 2.7-month supply at the current sales pace, down from three months in August and four months in September 2019.
“There is no shortage of hopeful, potential buyers, but inventory is historically low,” NAR Chief Economist Lawrence Yun said in a press release. “To their credit, we have seen some homebuilders move to ramp up supply, but a need for even more production still exists.”
A startup company in New York City has a unique approach to the issue of a housing inventory shortage. Rather than wait for homebuilders to create new residential properties, Welcome Homes is giving buyers the ability to build their own homes.
Welcome Homes has an online platform that enables a person to create a home to fit their preferences from scratch, choosing all aspects of the construction from land parcel selection to interior designs. The company promises that it can deliver a new home within a six-month timeframe.
Alec Hartman, founder and CEO of Welcome Homes, acknowledged that the inspiration for this endeavor came out of his own homebuying frustrations.
“About a year and a half ago, my wife and I went to go look for a second home,” he said. “It”™s kind of cliché, but like all New Yorkers we went to look in the Hamptons. It was supposed to be super enjoyable, right? No, it was just so awful for us ”” we did not like anything that we saw and forget about pricing.”
Hartman, who co-founded the cloud computing firm Digitalocean, then recalled how he went online to buy a customized car for his wife, and then paused to consider what if that process could be adjusted for custom-built housing.
“I just turned to her and I was like, ”˜I don”™t understand why can”™t I just do this for our house,”™” he said. “That thought really made a dent in my head.”
Hartman would eventually find the property site he wanted and built his own home, noting, “I learned how to use a nail gun and screw gun.” He theorized that he was not the only homebuyer who would want to have this level of control over the process, albeit in a user-friendly manner.
“You come online, you select a plot of land from our inventory and you select one of our home models ”” which is really easy because right now we only have one model,” he said. “And then you can customize it online exactly like an online car builder. We have a ton of views that are all photorealistic 3-D quality. You can change tiles, you can change backsplashes, you change flooring, even door handles, so you get granular customization of your home.
“And we”™ve curated these products so that you”™re getting really good quality,” he added. “It might not be the most expensive one, but you”™re getting really good quality and really good design for the value that you”™re putting into the house. And we spent a lot of time making sure that we got that one right for people.”
Welcome Homes launched officially on Oct. 20 and is focused on the tristate region. The company is offering homebuilding and homebuying opportunities in Westchester and Putnam counties, Greenwich, as well as New Jersey”™s Morris and Bergen counties.
Hartman chose to focus on these markets due to the “exodus from the city,” noting that his company “selected lots that made sense financially.”
Hartman”™s endeavor has recently received $5.35 million in seed financing led by Global Founders Capital. He plans to use this capital infusion to expand into other markets.
“I think we”™ve got the best possible support we can have to take on this,” he said. “It was hard to find the right partners, but I feel like we really did a great job in finding them.”
