HOUSINGNEWS REPORT
FEATURED ARTICLE
Construction Loan Volume in Select Markets 2015 2016 Pct Change
73%
$10,000,000,000
80%
$9,000,000,000
70%
$8,000,000,000
60%
51%
$7,000,000,000
50%
$6,000,000,000
26%
$5,000,000,000
40%
$4,000,000,000
30%
$3,000,000,000
9%
20%
$2,000,000,000
10%
$1,000,000,000
$0
0%
Washington, D.C.
Cleveland
Seattle
Los Angeles
73 percent from 2015. Dollar volume of construction loans secured by existing single family homes increased 20 percent while dollar volume of construction loans secured by residential vacant land increased 29 percent. Small-lot subdivision is a hot trend in several urban markets across the country, according to Chris Richter, co-founder of Audantic, a real estate analytics company that provides market research and leads for real estate investors. “You’ll see much more development in the city … they don’t do that in Tulsa,” he said, pinpointing Los Angeles, Washington D.C. and Seattle, where he lives, as three of the top markets for infill development. “Stuff here they’ll pay $500,000 for one little lot. … It baffles me when I drive around.”
In my opinion small lot subdivisions are the No. 1 for-sale trend.”
Jonathon Dilworth Founding principal, c&d partners, Los Angeles
Infill Development Deals Across the country in Los Angeles, where the distressed market has also dried up and there is not much space to build large new developments, investors are turning to small-lot subdivisions to add value and create inventory. “In my opinion small-lot subdivisions are the No. 1 for- sale trend,” said Jonathon Dilworth, founding principal of c&d partners, which is converting two single- story single family homes into four two-story single family homes at the corner of North Mansfield Avenue and
Fountain Avenue in Los Angeles. Dilworth said a 2005 ordinance by the city of Los Angeles opened up the possibility of building single family homes with zero lot lines. “Without that you’d be classified as townhome or condo, which is not valued as high.” A total of 3,020 construction loans were originated in the Los Angeles metro area in 2016, up 5 percent from the previous year to the highest level since 2007 — a nine-year high — according to ATTOM Data Solutions. Those 3,020 loans represented nearly $9.0 billion, up
ATTOM Data Solutions • P3
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