Navigating a Residential Boom
Q&A with Vice President Mike Roselli
The Triangle continues to build on over a decade of residential market growth. This sustained activity has attracted new regional and national players to the homebuilding and development market. We sat down to ask Vice President Mike Roselli about a few of the trends he sees that are important when building project schedules.
What is the hottest part of the Triangle’s residential market right now?
Everything is busy, but the first thing that comes to mind is the continued first-time homeowner boom in Wake, Durham, Harnett, and Chatham Counties. The $400,000 and under starter product can’t keep up with demand. This used to be detached, but it is increasingly becoming attached, with townhomes becoming the new first-time product.
Where do you see the most activity?
With so much demand in the broader Triangle region, there is movement everywhere. We continue to see people trading longer commute times to be able to buy bigger product, especially in first-time product markets. Angier and Fuquay-Varina are increasingly hot markets, and Durham continues to be a townhome market. Increasing land prices are the driver for this pattern – the deals that make sense in this demographic only pencil where the land is still available and priced for entry and mid-level housing product returns.
How is all this activity impacting development?
The biggest thing that is impacting our clients is timing, and this is a function of the sheer volume of projects coming through the review process. Growing communities are inundated with project submittals and are having a challenging time maintaining review cycles for comments and feedback. I would recommend developers and builders work with their consultants to consider recent approval timelines in their deals.
What are other challenges facing the market right now?
The available land is getting steeper, and utility capacities are thinning. This is increasingly driving development costs due to utility improvements and required retaining walls. So not only are projects becoming more expensive on the land side, but on the improvement side as well.
What are you doing to help clients win in this challenging market?
We have found that providing thorough and up-front due diligence for development sites is key, allowing our clients to have more options with less hurdles. Our team helps clients identify the development opportunities they should chase with more in-depth preliminary analysis. Typically, this means more time and energy on the front end, but it is critical when land becomes more difficult to improve.
This sets our clients up for success and lays out their entitlement path with a clearer heading. The more information you have, the better purchasing, planning, and entitlement decisions you can make.
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