what premium are you seeing to urban and urban adjacent SFRs compared to suburban?

[Robert Ellis]

We just ran the new build comps for our market in Columbus Ohio and saw a pricing premium of more than 40% in the urban core for infill work. That begs the question are you seeing similar in your markets with either single family homes existing or new construction? I think it helps to drive a strategy that if you can invest, build, flip, etc why not do it in zip codes with the greatest price per square foot where you can also find either land or existing inventory that makes sense? Before we go into any project we price the existing comparable set of new construction projects delivered in a trailing 12 months compared to the market or zip code averages as well. In this case, new construction is only 1/11 homes in our market so we use the whole market. Here's our raw stats and would love to see yours in your market

Market Average (All New Builds in Columbus MLS, 2024):
Avg. Price: $508,885
Avg. Size: 2,388 sq ft
Avg. Beds/Baths: 3.48 beds / 2.28 baths
Avg. Price Per Sq Ft: $219.10
Garage: 2-car attached

Urban Infill (4 Comparable Homes Near 296 E Innis Ave, Columbus OH 43207 0.84-Mile Radius):
Avg. Price: $424,950
Avg. Size: 1,345 sq ft
Avg. Beds/Baths: 2.5 beds / 2 baths
Avg. Price Per Sq Ft: $316.66 (🔥 44.5% premium over market!)
Garage: Mix of attached/detached/no garage

What we found in our urban core is smaller homes are selling at massive premiums and also the urban adjacent nature of it pushes prices as well. Rents also tend to be higher. We modeled every new build in our market every year and find that it's exponential growth as you build smaller your returns go higher and I would guess it's the same for existing. 

please comment on your market and trends if you've seen similar patterns anywhere in the country. I would guess that this is a trend nation wide. When I get a call thats like "can you build over xxxxx" I ask why they don't want to build or invest where premiums are greater than 40% higher than the market?