So far, new urban projects weather downturn better

New Urban News Article with images, 10/1/2007

Product diversity, closeness to transit, and the appeal of urban living help offset the biggest housing decline in years.

Sales of new housing slowed in August to the most laggard pace in seven years, and some conventional homebuilders reported losing tens of millions of dollars per quarter. New urban projects, however, have kept chugging along — many of them marginally affected by the market’s decline.

As higher mortgage rates and the subprime lending crisis drove many homebuyers out of the market, the number of unsold new and existing houses jumped to nearly 4.5 million nationwide — almost twice as many as in early 2005, according to The New York Times. Figures for July showed the median price of new housing had dropped 7.5 percent from a year earlier, to $225,700, the sharpest monthly price decline since December 1970.

Some new urban developments are suffering along with the rest of the market. “The buyers are basically on strike,” said John Anderson of New Urban Builders, a developer of traditional neighborhood developments (TNDs) based in Chico, California. “We’re selling one house a month in a project that should be selling four to eight. We’re not decreasing prices, but we are offering incentives like paid closing costs and landscaping the backyard for free.”