Page 12 - Sites_August 16

TOWNHOUSES continued
These facts are due to current
economic conditions. There are simply fewer rst-time buyers in the market, as rental demand continues to be strong. The National Association of Realtors’ existing home sales data reveal that only about 30% of existing homes—lower priced and less valuable than
new construction—are sold to rst-time buyers. This is lower than the typical 40% expected for rst-time buyers.
First-time buyer shares for new construction are lower still. Rising regulatory costs, which are up about 30% over the past ve years according to estimates by the NAHB, mean it is more expensive today to build housing. As these costs must be absorbed or passed along to consumers, the economics
of the market require the product mix
of homes to shift to more expensive offerings.
Townhouse construction offers an interesting exception to this rule. Single-family attached homes are smaller. Census data for homes started in 2015 show that while the average square footage of single-family homes was 2,689, for townhouses the average was 1,983 square feet.
And despite the more general upward shift in the new-home market, townhouse construction is growing. My calculations using Census data indicate that townhouse starts totaled 94,000 starts for the last four quarters ending with the rst quarter of 2016. This marked a 29% gain over the prior year. This growth rate exceeds that
of the total single-family building market.
The current townhouse market share stands at 13% of all single-family homes on a one-year moving average basis. This is down just under 15% from the cycle high set at the start of 2008, but the market share has been rising following the end of the
Great Recession.
These trends will continue. As regulatory cost impacts persist and millennials enter the for-sale market, the cost of construction and the growing demand for medium-density housing in walkable neighborhoods in inner and outer suburbs will support townhouse development growth.
Call the GREEN Heating and Cooling Experts at Airtron Today!
Big Savings from Environmentally Sound Installations and High E ciency Equipment
(317) 783-3101
www.AirtronIndy.com
5150ElmwoodAvenue• Indianapolis,IN46203
Passed over 2000 Energy Star® performance tests in last three years
Local Energy Star® Experts Geothermal System Experts
Indoor Air Quality Products and Evaluations
NAHB Certi ed Green Professional Designation
Airtron License #: H0000865
DirectEnergy® andtheEnergyBoltDesignaretrademarksofDirectEnergyMarketingLimited.