The cookie-cutter homes that dominated the Valley landscape for decades won’t be as common in the future as the real estate market climbs out of the recession and builds new kinds of housing.
The decline of oft-ridiculed copycat construction is one of several trends predicted by the W.P. Carey School of Business at Arizona State University. Builders also are designing housing for specific lifestyles, while various factors are limiting the number of new homes going online.
The recession brought an end to builders focusing mostly on building homes quickly to meet demand, said Mark Stapp, a real estate developer and director of ASU’s Master of Real Estate Development program.
“It’s a very competitive marketplace and builders are looking at ways that they can become more distinctive,” Stapp said. “Builders have learned a lot more about targeting specific segments of the marketplace, and targeting products for them.”
Homebuilders have responded to a surge of buyers in the past year, with sales up 40 percent in the Valley. Home values are up 25 percent as the glut of homes for sale is vanishing quickly. Stapp believes demand will continue to grow as people who sat out of the home market get back in.
Those buyers will look for different features than before the crash, he said.
That includes homes that use significantly less energy to ease concerns about how much a house will cost over its lifetime. Also, buyers are less likely to live on the fringe of the urban area. Lenders, too, are leery of financing far-flung subdivisions, Stapp said.
Lenders and builders have become more interested in smaller infill projects, especially along the Metro light rail line.
“Walkability is a big issue,” Stapp said.
Apartments have become more popular, too. Some buyers soured on the idea of ownership after property values crashed, while others lost their home and are waiting for their credit to improve before they can buy.
The new apartments often don’t resemble what was built just a few years ago.
“We’re seeing some more recognition that the rental marketplace has evolved because of the economic crisis and the fact that you’ve got a lot of people who had families who were displaced,” Stapp said. “Therefore, they have a need for larger units and amenities with floor plans that look and feel more like a single-family home.”
Prices remain too low for builder or lenders to construct the high-rise condos that were briefly popular during the bubble, but Stapp said some apartments are designed to be sold as condos when values rise.
Builders will probably avoid creating another bubble for reasons that are mixed, Stapp said. Lenders and builders are cautious because memories of the housing bust remain fresh. And the number of new homes built could remain historically low because so many tradesmen and laborers left Arizona when the construction industry slumped.
“We’re going to see a difficulty in meeting some of the demand if this market really begins to increase,” he said.
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