Single Family Housing refers to for-sale individual residential housing units built for one family to own and occupy. Single family homes are either attached or detached. Detached homes are built on their own lots and do not share any common walls with other units. Attached homes, such as townhomes, share either one or both side walls and consist of multiple units in a single contiguous structure on one level. Multi-level ownership units such as condominiums are not usually included in the single family housing sector, the major distinction being that condominium owners do not own the land under their unit while Single Family owners do. Homes can be custom built to the exact specification of an owner, but more often today they are manufactured by large national home builders who offer several models to choose from but allow few changes to the plans. Home building starts with the land. Some home builders buy raw land, get the necessary approvals to build, and prepare the lots by grading the site, bringing utilities, and paving roads. Then the individual lots are sold to home owners who chose which model home they want built. Other times, land developers do the leg work buying raw land and preparing the lots. These lots are then sold in bulk to home builders who in turn sell individual lots to home buyers. This process eliminates entitlement risk for the home builder.
Information on this page provided courtesy of Cornell University Baker Program in Real Estate
Single Family Housing is perhaps the most important real estate sector in terms of the extent of ownership across the United States. Since 1981, according to the U.S. Census Bureau, homeownership rates have hovered between 65 and 70%. It was not until 2004 that ownership rates reached 69%. At first this appeared to be a good sign that more Americans were achieving the dream of home ownership, but eventually this high rate proved unsustainable. As in all real estate, housing markets are cyclical. The long term future of home building will be driven by job and population growth. Short term, builders as well as home owners looking to sell are waiting for financial markets to cool off and lenders to begin lending again. Until this happens, home prices will continue to adjust downward and builders will have unsold inventory.