Definition
New construction market share is percentage of sales in new homes versus existing homes. High share (30%+) indicates active builder competition. Low share (<10%) indicates mature market focus on resales.
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New construction market share measures percentage of transactions in new homes versus existing homes. High new construction share (30-40%+ in growth markets) indicates: strong builder activity, market growth, new development areas. Low share (<10% in mature markets) indicates: limited new construction, mature market focus on resale. New construction competition affects resale pricing: high new construction share puts pressure on existing home prices (buyers choose new construction). Low new construction share provides less competition for resale homes. New construction market share varies geographically: growing markets have high new construction share; stable mature markets have low share. Understanding new construction competition helps with pricing strategy: in markets with high new construction, existing homes might need strategic pricing to compete. In low new construction markets, existing homes have less competition. New construction market share also indicates market health: rapid new construction share increases often precede market over-supply. Builder activity and new construction permits are leading indicators of future supply.
Pro Tip
If new construction market share is high, existing homes must compete with new construction warranties and incentives. Price accordingly.
Example
Market data shows 25% of residential sales volume is new construction, 75% is resale. New construction market share of 25% indicates moderate builder presence and new development.