Cohousing in today’s real estate market
While news reports turn to economists and other pundits to anticipate where the real estate market is headed, Cohousing magazine asked a couple of our own experts, Wonderland’s Jim Leach and Cohousing Partners’ Katie McCamant, to jump into the fray. They were asked:
“How will the cooling housing market impact cohousing communities?”
Jim Leach replies:
From my experience a cooling housing market will affect all types of housing sales, but not equally. Existing established and built communities will probably be affected very little in that cohousing tends to turn over not nearly as much as the general housing market and communities will likely not notice much effect from a cooling cycle in the market.
New cohousing communities, as a very small and specialized housing market, are less likely to be as negatively impacted as the general market. In Colorado we have found that it usually takes potential cohousing buyers a long time to get comfortable with a decision to purchase in a community but when they do, they become very committed to wanting to live in cohousing. This, plus the very limited supply of cohousing homes for sale, tends to insulate the cohousing market from the downturns in the general housing market.
Local housing market conditions are probably the most important factor. If the local market is soft or over-supplied, all buyers will be slow to purchase and tentative in their buying decisions. With that said, I think this is an excellent time to consider buying in cohousing at least in Colorado. Our local markets have cooled enough to settle land prices and construction costs down, interest rates are still very reasonable in the 6% to 7% range, and there are new communities looking for members. We even have some unsold homes under construction in our Lyons and Silver Sage communities in and near Boulder, and we are working with three other communities in the Denver area that have sites and are actively seeking members.
In spite of the cooling housing market, we are seeing the interest in cohousing expand due to the slowly growing awareness among Americans of the importance of community in helping to create a more sustainable world.
Asked the same question, Katie McCamant answers:
Cohousing has weathered past cooling markets better than other types of housing. The first California communities (Muir Commons, Doyle Street and Southside Park) were completed in the midst of a significant five-year recession in California (1990 – 1995). All units sold in these communities and no one lost money (unlike most other new housing developments being completed at the time). Cohousers are looking for good long-term value. The cohousing price range (middle income and relatively affordable compared to other new housing) and the emphasis on energy efficiency, good quality building and community will have even more value in less certain economic times. While the housing market has its up and downs, in the long run, well-located and well-designed neighborhoods have always been and will likely continue to be an excellent investment.
But I sure wouldn’t want to be building big stucco single-family homes in the suburbs which require lots of energy to heat and cool plus lots of gas to get to and from right now!
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