Homebuyers who want to have their cake and eat it, too – in the form of a residence that lives like a single-family house yet offers the conveniences of an urban condo – are choosing townhomes, and apparently in greater numbers.
The National Association of Home Builders reports that total townhome construction rose dramatically in recent months, from 11,000 starts in second quarter 2011 to 17,000 starts over the same period in 2012. Market share of townhomes currently is at 11 percent of all single-family starts, an increase from 10.4 percent in first quarter 2012.
Why the recent spike in demand for townhomes? Stephen Melman, director of economic services and housing policy at NAHB, says buyers are more cautious about what they purchase today.
“They are opting for the amount of shelter they need, and not more,” Melman says. “Generally, townhomes are priced more affordably because they are on smaller lots. Monthly energy costs are easier to manage in a townhome design. And more buyers are making choices to minimize maintenance costs and time.”
Townhomes typically include two or more units per building; townhome units often feature a small yard, rear deck or patio. Many townhome communities have homeowner association fees that generally cover upkeep tasks such as lawn care, snow, leaf and waste removal, and landscaping.
An indication of townhomes’ wider appeal may be their changing floor plans. “For most of the last decade, the typical townhome floor plan was an entry hall, garage and one bedroom on the first floor; with the dining room, living room and kitchen on the second floor and a master bedroom and secondary bedroom on the third floor. This floor plan works well for couples with one or no children,” says Steve Bland, agent with Better Homes and Gardens Real Estate Gary Greene, Houston.
But Bland says newly constructed townhomes favor a wider variety of homeowners: “Lately, we’re seeing more new-construction townhomes going back to a more traditional home style, with the garage and public rooms on the first floor and all three bedrooms – and maybe even a game room – on the second floor, or alternatively on the third floor.”
Townhomes provide an ideal option for those who wish to own property in a more established, walkable neighborhood near public transportation, highways, stores and restaurants, and popular urban amenities, which is why they appeal to many types of buyers today.
“First-time homeowners like the idea of owning a house at an affordable price point, and young professionals and empty nesters enjoy the ability to live in a medium-densely populated area,” says Maike Scherer, CEO of Capital Home Management, Great Falls, Va. “And a townhome offers more privacy as compared to an apartment. They are a great long-term buy, and, in our experiences, are very easy to rent out.”
Suzanne F. Schakett, senior vice president of builder products, National Builder Division of Envoy Mortgage, Houston, says townhomes are more popular in the Northeast, “but there is a growing demand in most markets across the country.”
The disadvantages of owning a townhome include potentially high HOA fees, the possibility that the HOA board is too strict or not managed well, privacy issues and limited storage and yard space.
Melman recommends shopping and comparing townhomes carefully before committing to a purchase, as well as seeking out word-of-mouth recommendations.
Additionally, thoroughly review the covenants, conditions and restrictions (known as CC&Rs) to clearly understand the parameters, and learn exactly which maintenance tasks and services are included with the monthly HOA fees.