New Urban Projects Faring Well In Declining Market

"Sales of new housing slowed in August to the most laggard pace in seven years, and some conventional homebuilders reported losing tens of millions of dollars per quarter. New urban projects, however, have kept chugging along — many of them marginally affected by the market’s decline."

"In most markets that were thriving two years ago, such as metropolitan Washington, DC, the reductions have been most dramatic at the region’s edge, according to Patrick Phillips of Economics Research Associates. “Production builder clients are clear on that, and increasingly pessimistic in terms of the depth and length of the downturn,” Phillips said. Anecdotal evidence suggests that infill and transit-oriented development are holding their values better than other kinds of projects."

"For example, in close-in, high-density Arlington, Virginia, which is served by Metro rail, prices in mid-2007 were up 20 percent from a year earlier, according to Phillips. DC itself was up 5 percent, Phillips said, whereas most other jurisdictions in the region slipped."

"Product diversity, closeness to transit, and the appeal of urban living help offset the biggest housing decline in years."