In markets like New Jersey, low for-sale housing supply isn’t just caused by a lack of new listings, but according to builders, it’s also due to a lack of vacant land. In February, the number of homes for sale was down 13.7% from the previous year, while the number of newly listed homes fell 28.5% during the same time period, Fortune reports.
With a dearth of new homes and little space to build, New Jerseyans are being forced to tear down and start over.
House flippers have always been around, but the rise of teardowns in New Jersey is happening at a much larger scale, and it’s becoming a more common practice in the market.
Depending on the neighborhood, Counts says has seen potential buyers bid on homes with large upsides, particularly if the margins aren’t high enough for builders. There was a home in Scotch Plains, N.J. and the margin wasn’t there for a flipper, so [Curtis] Counts listed it for around $500,000, got an offer for $450,000. The buyer bulldozed it and built a home worth close to $2 million in its place.