Micro-Homes, but not Micro Pricing
Living Small…
DR Horton, one of the nation’s leading homebuilders, recently unveiled plans for a “micro-homes” project on Portland’s east-side. The project, currently marketed as Division 43, will be located at SE Division and SE 43rd. Division 43 follows the latest urban trend towards living small, both in terms of space as well as environmental footprint. These for sale condo units will range in size from 364 sq. ft. (studios) to 687 sq. ft (2-bedroom). Built from reclaimed materials, DR Horton hopes to create a “neighborhood within a neighborhood” that appeals to the energy-efficient, car-free crowd. Prices start in the low 100s.
Living Green?
The proximity to a wide range of amenities (e.g. Stumptown, New Seasons etc) as well as the mass transit and biking infrastructure definitely support this kind of a product, but I am not so sure about the environmental footprint argument. Sure, small spaces require less building materials and consume less energy, but from a per-capita point of view a high-density, multi-family/apartment product would arguably be the more efficient way to go.
Living Pricey!
DR Horton has yet to determine final pricing, but with price points expected to settle in the mid $300/sq. ft, Division 43 will be priced higher than similar condo projects in the area. Neighboring Meranti Lofts is probably the most comparable development. When this modern, four-story condo development was completed in 2006, units sold for in the low to mid $300/sq.ft. Needless to say, the market has declined since then. Although Portland’s inner south-east has held up against price deterioration more than most neighborhoods in town, this has not been the case for the Meranti Lofts. Lenders ended up repossessing several units (#304 by US Bank, #204 FNMA), and then unloaded them for as low as $120/sq.ft (#204). Clearly, price points in the mid $100s/sq.ft don’t exactly help when you are trying to sell a similar product in the mid $300/sq.ft – even if it is brand new, sustainable, organic etc.
Don’t be fooled. Work with someone who knows the market and the numbers.
