As the real estate market continues to gain traction, savvy brokers and agents who are ready to take their business to the next level are constantly on the lookout for the next big thing. While new-home construction has been dominating the headlines recently, there’s a new trend in town that promises even more opportunity.
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 ’70s and ’80s.
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, infill has grown to more than 20 percent of all new construction nationwide. In some larger urban centers we find 50 percent 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 and 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 percent 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.
Dennis Walsh is co-founder and CEO of Dennis Walsh & Associates, Inc., based in Newport Beach, Calif., recognized as real estate’s No. 1 source for training and sales tools specific to new home sales and residential construction. He is also author of the book “Real Estate’s Best Kept Secret.” More than 150,000 real estate professionals have enjoyed Dennis’ presentations, Certified New Home Specialist™ (CNHS), Residential Construction Certified™ (RCC) and 203K Specialist courses. For more information, visit www.sellnewhomes.com.
