Go Where the Buyers Are
The demand for apartments is decreasing while that for single-story, single-family homes is on the upswing. What does that mean for residential builders and investors?
Apartment construction has been a major driver of growth in the housing sector, but recent data suggests the market for apartments might be slowing down with single-family housing borrowing some of that steam.
According to a Wall Street Journal article, each year since 2010, construction of apartments and condominiums has grown at a faster rate than single-family homes. But that trend may be reversing itself in 2016, with the article further stating that forecasts from the National Association of Home Builders and housing-research firm Metrostudy show the apartment boom cooling off as construction of single-family homes ticks up. Metrostudy projects growth of 14.6% for single-family starts this year compared with 5.4% for multifamily. The National Association of Home Builders is predicting single-family growth of 19% in 2017, compared with 2% for multifamily.
The ultimate goal: a single-family home
At its National Association of Home Builders (NAHB) Spring Construction Forecast Webinar, the NAHB forecasted that single-family production is expected to post a 14 percent gain in 2016 to 812,000 units and rise an additional 19 percent to 964,000 units in 2017.
Furthermore, the NAHB projects that single-family production will rise to 64 percent of normal by the fourth quarter of this year and climb to 77 percent of normal by the end of 2017.
“Consumer surveys suggest the ultimate goal of millennials is to purchase a single-family home in the suburbs,” said Chief Economist at the NAHB, Robert Dietz. “We see growth for single-family looking ahead. The recovery continues and is dictated by demand side conditions and supply side headwinds,” he said.
What home buyers want
It’s not just millennials whose ultimate goal is a single-family home in the suburbs. A whopping 65% of all new buyers expressed interest in a single-family home, as per an NAHB report.
Most home buyers, especially Gen-Xers and Boomers, are also looking for single-story homes and millennials are interested in buying homes that allow them to entertain friends and family easily.
Residential building investors are especially advised to pay attention to the 55+ demographic market, which constitutes one of the fastest growing population segments of the country, according to the NAHB. The association states that the share of U.S. households age 55+ is on a steady upswing with the percentage rising to 46.6% by 2020. Equally relevant, people 55+ are the majority of new home buyers, as per a Metrostudy report.
The takeaway here is that apartment construction is on the downswing, while the single-family, single-story homes, with plenty of room for entertaining, is where more buyers are.
How Epcon Franchise Builders Fill Demand Niche
While buyer demand for such homes is certainly strong, the supply is still off the mark. Nationally, a Metrostudy report found a large discrepancy between demand and supply of homes, especially for the booming 55+ market in the kinds of homes that these customers would want to buy.
There’s a market demand here that can be filled by builders who have proven systems in place with homes that appeal to the 55+ segment, and with processes that can build such residences rapidly for faster return on investment. Enter Epcon Franchising.
Epcon is the 40th largest home builder in the United States and the 22nd largest Private Home Builder (Builder magazine, 2016). Epcon has thirty years of experience in homebuilding and 20 years of experience in franchising. Epcon’s copyrighted floor plans, most of which are for single-story homes, are a result of heavy investment in market research that evaluate buyer preferences.
Epcon Franchise Builders follow Epcon’s proven processes and systems to build homes that fill the demand niche. What’s more, because of powerful marketing and sales techniques, Epcon communities enjoy rapid sell-through freeing investors to reinvest their capital in new projects.
Real estate builders and investors looking to get in on a ripe opportunity in an early stage before the rest of the market has caught up, are advised to take a careful look at Epcon, which meets home buyers where they’re at and delivers exactly the kinds of homes they’re looking for at a pace that creates a rapid return on investment.
Investigate the Epcon franchise opportunity
Disclaimer: The offer of a franchise can only be made through the delivery of a Franchise Disclosure Document. Certain jurisdictions require registration prior to the offer or sale of a franchise. We do not offer franchises in jurisdictions where we are not registered (or exempt from registration). Epcon Communities Franchising, Inc. 500 Stonehenge Parkway, Dublin, Ohio 43017. Minnesota Franchise Registration No. F-3531.