Single-family construction's slow recovery, along with a pervasive lot shortage, means more tear-down projects are likely, MarketWatch reported.
Teardowns in 2015 accounted for 7.7%, or 55,000, of all single-family starts, according to figures from the National Association of Home Builders, a number that is expected to grow. The teardown market was strong in the late 1990s and early 2000s and petered out during and immediately following the housing crash.
Challenges facing the teardown market include aligning the new property with its existing neighbors, zoning rules and square footage caps.
The pickup in teardown projects comes as the housing market continues to rebound following the recession, in its current state experiencing an environment of high home prices and limited inventory.
In its third-quarter Home Design Trends survey, the American Institute of Architects noted the increased popularity of teardowns and infill projects. The AIA found that 68% of respondents in 2016 said teardowns were increasing in popularity compared to 57% in 2015. Meanwhile, 68% of respondents said infill developments were increasing in popularity in 2016 compared to the 65% who said the same in 2015.
Single-family housing starts fell 4.1% from October to November, bouncing back from a multifamily-led surge in October. Existing home sales hit their highest annualized pace in nearly a decade in October while new home sales dipped heading into the fall.
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