Attached Housing to become more popular with market conditions

The current housing slump has led many developers and builders to downsize single-family dwellings and focus more on attached style homes to increase affordability and boost sales. This move toward more condos, townhomes, and lofts makes sense during an economic downturn. When sales are slow, developers know that smaller homes beging to make more sense. And with each sale, builders can eliminate homeowner association fees, which they must pay on unsold units.

Many market experts and analysts are claiming that smaller housing will become a permanent mindset in the new-construction market. Furthermore, with less developable land, many major metro areas such as the San Diego condo market, are facing less and less room for large single family homes. With larger homes there are higher costs of all factors of production, particularly costs of materials and labor.

Because there is less money being spent towards new housing, builders must realize that smaller units generally sell for less money. This is actually helping builders target current buyers in the marketplace.  If you take a close look at the primary new home buyers in the market, you will see two demographics. One is baby boomers who are downsizing and the second is generation Y (children of babyboomers). This generation is just entering the housing market and has lower income and net worth. I am predicting that based on this we are going to see new construction shift towards to be a higher % of attached housing projects, especially in metro and surrounding areas.