III. Industry Analysis
The property development industry in the United States is valued at an estimated $231B. There are currently around 64,982 housing development businesses and over 180,000 employees working in the industry throughout the country.
Industry operators must focus on the accuracy of their cost estimations and successful bidding tactics to ensure profitability. Large established industry players have advantages over new entrants because they have more access to capital. However, smaller companies and new entrants can compete by targeting a specific market niche or geographic location.
Demand determinants for property development include population growth, disposable income, and employment rates. A significant trend in the residential real estate market is the rising demand for single family homes which has led to increased costs for new homes and more people moving to the area.
Millennials who are ready to buy their first homes are boosting housing market growth rapidly. This increased demand has resulted in single family home availability being the lowest it has been in the past 40 years.
National statistics reflect the local market. Last month there were approximately 830,000 homes on the market in the U.S., down 39% from this time last year. This has opened up an opportunity for new property developers looking to build new residential homes.
