Multi-family units propel market

| Wednesday, Aug. 31, 2011

The nation's housing market may be in the doldrums -- but there is at least one bright segment.

Builders here and nationwide are building more multi-family housing units, specifically what builders term "attached" units. These are commonly called townhouses, carriage, patio units and quads in which all of the units share a common wall.

There are many reasons why this segment of the housing industry is growing, experts say.

The savings a homeowner gets from reduced utility costs and maintenance free exterior work -- savings also experienced by the builder -- have driven the development of residences with shared common walls, said Jeff Burd, president of Tall Timber, a Ross company that tracks residential and commercial development in Western Pennsylvania.

In a mid-year 2011 report, Burd said there were 507 "attached" units built in the region, up 56 percent from the 325 attached units at mid-year 2010. Traditionally, 1,500 to 2,000 attached housing units are built in this region each year, he said.

There also were 850 single-family or stand alone houses built, up 4.2 percent from the 816 last year.

U.S. Census figures for building permits issued nationwide through July show 45 percent of housing were attached buildings with two or more units, or 126,700 of 279,900 total permits. That's up from 33 percent, or 111,400 of 329,500 total units in 2010.

Maintenance free living -- not having to shovel snow in the winter nor cut the grass in the summer -- are one of the reasons Bob and Sandy Fulton purchased an attached house in the 81-unit Hill Station Manor in Cecil Township. Both retired, the empty nesters moved out of a single-family house in South Fayette.

"We just love it here. Our neighbors are great, the walls are so insulated we don't hear them. We live on one floor in this two-story house where we have our master bedroom and master bath, plus the laundry room, on one floor," said Bob, 69.

"And we love having a clubhouse, plus an exercise room, and not having to walk up steps," said Sandy, 67.

The Fultons normally spend the winters in Florida and don't worry about their home here because of the complex's security system and watchful neighbors. They plan to pay off their mortgage with its current 4.75 percent rate in five years, but are considering refinancing.

Attached homes are big with the region's top builders.

Burd said NVR Inc., parent of Ryan Homes, built 94 units of attached housing, which is one-third of its production so far this year.

Heartland Homes of Lawrence, Washington County, besides building stand alone single-family houses, also builds townhomes and carriage houses, which is 16 percent of its volume, said Kevin Oakley, marketing director,

"We find our customers who prefer attached housing are usually empty nesters and first-time home buyers," he said.

The location of these attached housing communities is important, he said. They should be located near shopping, entertainment, recreation and fitness centers, he said.

Trek Development Group of Pittsburgh will build about 125 housing units this year, 100 of them attached housing, said Bill Gatti, president and owner.

"The trend has been to build attached housing due, in part, to the problems of the single-family housing market," he said.

"You normally see attached housing more in the rental housing market than in the for-sale market because it creates higher density that makes it is more economic to operate. The higher the density, the more economical it is," he said.

Building attached houses is nothing new for John Thompson, a partner in Brooks & Blair Homes.

"That's all we build," he said.

Most of his developments are for-sale housing -- priced anywhere between $180,000 to $320,000. The prices tend to be lower than those for comparable stand-alone single-family houses, which include larger lots and four walls that usually have brick or vinyl exteriors.

Thompson also is senior vice president of AR Building Co., which builds townhouses and other attached housing units, all as rentals. At his firm's Summit Ridge development in Oakdale, 136 units have been built and another 32 will be started soon, he said.

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