Most everyone in real estate is aware of the exciting growth in the new home sales arena. After years of little residential construction, we’re seeing builders and developers swinging into action in markets large and small from coast to coast. With increased household formation and a huge pent up demand for homeownership, experts project a need for many millions of new homes to be built through the end of this decade, with the possibility that we may see new home construction approaching the record levels seen back in the 70’s and 80’s.
While these new home sales drivers clearly present tremendous new opportunities for smart brokers and agents, there’s another related emerging trend that offers additional opportunities – Infill Development and Construction. As I share this concept in my travels across the nation, I find the term 'infill' is new to most folks in real estate. As I define the infill concept and present the opportunities and strategies for success, many find it not only exciting, but an essential area of business to pursue.
Infill development describes situations where we're tearing down older buildings on a property in an established neighborhood -- older homes, apartments, hotels, commercial buildings, etc. – and rebuilding something new. As with any successful development, the key is to identify the new ‘highest and best use’ of these properties. Today, this can mean larger, more luxurious single family homes, new rental units, or condos. On larger parcels, a mixed use development combining residential options with retail or light commercial uses might bring great value to the community. More and more we also find the development of various types of live/work style housing to meet the needs of entrepreneurs, small businesses and other home based workers.
With the aging of our housing stock, higher land costs, and the growing desire of more people to move closer to urban centers, both large and small, it's estimated that infill has grown to more than 30% of all new construction nationwide. In some larger urban centers we find 50% or more of the total new construction activity is infill.
Infill construction is also driven by the communities themselves as city planners, zoning departments and others look for ways to bring new life, more jobs and increased tax revenues to support city services. Brokers working closely with their community planners can play a role in bringing new inventory, revitalizing, and shaping the future of the housing markets where they live and work.
What’s exciting is that infill development presents unique opportunities for brokers and agents to bring together the key players, including builders, investors, land owners and designers to bring these new projects to life. We're currently training and consulting with brokers nationwide to help them more successfully take advantage of this business – and learn the key concepts of ‘packaging’ these deals to the benefit of all involved. In the last several months alone, we’ve worked with industry leaders such as Howard Hanna Real Estate, Edina Realty, Intero Real Estate, Better Homes & Gardens – Mason McDuffie, Russell & Jeffcoat and others who recognize that they must move their organizations away from a primary focus on resales.
National studies continue to establish that 55% or more of active home shoppers prefer a brand new home and want to include both new and used homes in their search. As a result, it’s now essential that all brokerages and their agents are trained in new home sales to professionally meet the needs of this majority of today’s homebuyers.