Boom Last Call for Sprawl?
posted by February 20 at 12:15 PMon
Consider these two developments. First, this Texan exurb.
Big Dallas seemed to be knocking on little Lavon’s door. Thousands of lots were laid out and hundreds of houses built, as developers tried to meet what seemed to be an insatiable appetite for inexpensive single-family homes. Land values soared, the population hit 2,500, and by November, the city was finally flush enough to afford a full-time police department.
But that was when the knocking stopped. Banks were no longer giving mortgages to anyone who could fog a mirror. “For sale” signs went up and stayed up. Weeds, not houses, sprouted on the scraped-earth plots.
Unlike many other states with housing troubles, Texas as a whole is booming, continuing to attract new residents and create jobs. But across the state’s outermost exurbs, formed by waves of new housing, building has ground almost to a halt.
Second, this mega-development proposed between Redmond and Duvall.
Redmond Ridge East — 337 acres east of Redmond, on Novelty Hill — is part of a development plan that goes back to the 1980s and was caught up in litigation over traffic for much of this decade…. Quadrant Homes… announced Friday that it started selling the first of what will eventually be up to 800 homes.
The project was planned in a much different market than today’s. In January, the inventory of houses for sale in the Redmond area was up almost 60 percent from a year earlier, while sales were down nearly 40 percent, according to the Northwest Multiple Listing Service. Countywide, inventory increased about 56 percent and sales dropped almost 31 percent.
The slowing market has affected the project, however, most notably in its range of homes. Two or three years ago, such a project probably would have focused just on houses from $700,000 to $900,000, Reece said. Now, it includes smaller houses with prices as low as $550,000, he said.
This development and others like it present a litmus test for the future of Seattle’s housing market. Thousands of new condos are opening in and around downtown, and thousands more are on the way. But suburban developments like this one, lowering prices, will compete with the downtown high rises. (Of course, downtown buyers are less likely to have kids like the suburban buyers, and Seattle’s market differs from Dallas’s—there’s a semi-autonomous Eastside economy.) However, we’ve been told again and again that Seattle’s housing remains in demand—like Texas—and that even if prices drop, demand will stay high. But is there enough demand to fill the sprawl and the tall? Will one of them stand vacant for a decade while the market catches up?
If the tract developments go vacant while condos fill up, that’s a promising sign for density advocates.