When Rust Grows In The Front Yard

The real estate market has slowed, creating opportunity for homebuyers, builders and investors to negotiate an even better deal on your neighborhood "teardown" property (lot). In fact a common theme in most neighborhoods today is a "For Sale" sign in the front yard with "New Price" or "Price Reduction” added to the metal frame - starting to develop rust.

What happens after the sale and the house is demolished to dust for new construction? Does the buyer build another single-family home on the lot(s) or decide to replace it with a multi-unit dwelling? If the answer is a new multi-unit dwelling, then your neighborhood teardowns or price-reduced houses might be the targets for Infill Development (ie: Smart Growth).

This is a hot topic for the industry and is both the solution and problem for the parties involved. It concerns neighborhoods from the smallest towns to the world’s largest cities. Buyers should always review the lot zoning rules that regulate the kinds of activities and densities, which will be acceptable on a particular parcel of land. Homebuyers should be aware of what can be built next door. Moreover the multi-unit buildings built most often have limited space. The new family or owner that moves into the townhouse or condo might discover in a short time that "we found affordability but need more space." In turn, selling the home and not becoming a long-term resident of the community.

In parallel, some developers have switched from building, commute heavy - residential subdivisions in far out and rural areas. Aiming more towards parcels of land closer to suburbs with densely populated communities. This way the builder can expect a faster sale and lower the cost cycle to carry the land acquired.