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AUG 28, 2018

Home Buyers Growing Attached To Thought Of Townhome Living

Forbes

Soaring land and building costs, higher median single-family home prices, growing preference for dense, walkable environments and the need for a bridge between renting and first-home purchases are all helping bring back a staple of the 19th Century.

That Victorian-era essential is the townhome.

A National Association of Home Builders (NAHB) analysis of the most recent census data of “Starts and Completions by Purpose and Design” found townhouse construction starts continuing to grow. Over the four quarters ending with the first quarter of 2018, townhouse starts nationally totaled 105,000, seven percent higher than the prior four quarters. Employing a one-year moving average, new townhome market share is at 12.3 percent of all single-family starts.

“The share for townhouse construction is expected to increase in coming years, with occasional ups and downs,” the NAHB reported. “ The long-run prospects for townhouse construction are positive given large numbers of home buyers looking for medium-density residential neighborhoods, such as urban villages that offer walkable environments and other amenities.”

Beyond American shores

Recent reports have townhome sales surging in popular markets like Denver, Seattle, Nashville and San Antonio. It’s not a solely American phenomenon either. Australia and Canada are taking note of the surging popularity of townhome living in those countries.

The Chicago area is no exception to the trend. Particularly in the suburbs, millennials and baby boomers are increasingly drawn to townhomes, says broker Bill Gill with brokerage Baird & Warner in Chicago.

“We're seeing across-the-board increases in the number of sales of attached units, as well as in the average sales prices,” he says. “First-time home buyers are looking for something on the affordable end. And baby boomers are drawn to the maintenance-free lifestyle many townhome communities offer. A lot of new construction includes townhomes because it's more practical to build townhomes on infill property in areas where land is scarce, especially in the Chicago area.”

Highest in years

Among the best-known townhome builders in the area is Lexington Homes, which has specialized in infill townhome development in Chicago and inner-ring suburbs over the past four decades. Lexington Homes is unveiling Lexington Reserve in near west suburban Oak Park and Lexington Walk in close-in north suburb Morton Grove.

“We are seeing traffic and a sales pace this year that we haven't seen since before the recession,” says company principle Jeff Benach

Lexington Homes' townhomes are designed to address the desires of empty nesters seeking a downsized, maintenance-free lifestyle, Benach said. At the same time, they respond to the needs of formerly citified millennials seeking elegant and up-to-date residences in suburbs boasting retail, dining, nightlife and public transportation.

Don't discount the importance of proximity to trains and buses, Benach adds. “The days of buyers being willing to head way out into the suburbs to save $50,000 are long over,” he notes, pointing to a successful Lexington Homes townhome community two blocks from a Metra train station in northwest suburban Des Plaines. Express trains from that station can whisk passengers to downtown Chicago in as little as 28 minutes.

“We only build on home sites that are walkable to the train and often near commuter corridors and expressways,” Benach says. “Our communities also are typically walkable to popular suburban downtowns where residents can walk to restaurants and local events. Townhomes work for these locations because they fit on these smaller parcels. We also continually improve our floor plans to make the townhomes more expansive with open designs and features like lots of storage and large closets, as well as stylish finishes and color schemes. Bottom line is our townhomes provide a less expensive way for buyers to get a new home in a great location.”

Townhomes can also serve as a vital component in master-planned communities, where they complement single-family homes and duplexes. An example is Red Seal Homes' Provenance community in Chicago's mid-north suburban region.

New construction townhomes feature appealing prices that catch the eyes of home buyers, regardless of age. So says Brian Hoffman, a Red Seal Homes executive.

“The flexibility of our townhome plans also makes them a great option for buyers who know their space needs will change over time,” he says. ”We've featured unfinished basements with over eight-foot ceilings that give buyers an opportunity to create a space that works for them either at move-in or down the road.”

https://www.forbes.com/sites/jeffsteele/2018/08/28/home-buyers-growing-attached-to-thought-of-townhome-living/#66e110287349

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- Russell V.

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