Diverse housing mix, good for home ownership and place creation
We have been working in Atlanta, Austin, La Jolla and Laguna Niguel (CA), and areas of Northern New Jersey. These are residential and mixed-use development projects, mainly.
An interesting opportunity has presented itself in the for-sale housing market. Mortgage rate increases in the past year has tapped-down demand for homeownership. In most markets, the number of listings is down, days on market are longer, and price appreciation is at a smaller rate of growth. However, supply of existing homes remains tight and it is still a sellers market. That pushes buyer demand toward new home construction.
Take the Austin housing market as an example. Single-family detached homes were listed for-sale on average 34 days in March 2022 and 87 days in March 2023. For-sale listed townhomes spent 26 days and 37 days, respectively. Despite the impact on median list price for single-family homes due to rising mortgage rates, the sales velocity for townhomes remains relatively strong.
The opportunity is to introduce townhomes, cottages, and duplexes especially as new construction in a neighborhood setting that is rich in commercial and public space amenities (e.g., restaurants, coffee shops, fitness, personal and financial services, pocket parks, etc.).
Daniel Parolek of Opticos Design coined the term for this opportunity in 2010: the “missing middle”. Check out what he designed for Omaha-based residential developer, Jerry Reimer of Urban Waters: Bungalows On The Lake at Prairie Queen. The continued redevelopment of Mueller airport in Austin is another great example, which was started by a partnership between the City of Austin and Catellus Development Corp.
Given the trajectory of the for-sale housing market and the growth in new residential and mixed-use development projects, incorporating a diverse housing mix addresses two key goals: increase homeownership opportunities and create a walkable neighborhood-level place.
