Hidden markets for urban homes

If developers relied only on conventional market analysis, which focuses on what has sold in a given area in recent years, few if any new urbanist projects would be built. For that reason, new urbanist market analysts like Zimmerman Volk Associates of Clinton, New Jersey, have had to perfect new methods of projecting the number of households that potentially would locate in traditional neighborhoods. This brings us to Louisville, Kentucky, where the Housing Authority is building a traditional neighborhood called Park DuValle, filled with home styles and streets that haven’t been built in the city since before World War II. Furthermore, the neighborhood is located in a low-income part of the city that hasn’t seen much new housing of any kind for 50 years. Conventional market analysis predicted that zero homes would sell in Park DuValle. Zimmerman Volk’s methodology, which looks at the demographics of 30-plus types of households, resulted in a “conservative” projection that 39 market rate homes would sell in a year. This prediction was met with great skepticism, and the builders declined to construct the model homes on spec out of fear that they would not sell. Less than four months after sales began, 38 home sales were completed and 90 contracts were pending in Park DuValle. In addition, the greatest demand has been for high-end estate homes at about $250,000. The Housing Authority has discovered a completely hidden market for housing, which offers hope for deteriorating historic cities all across the US. Laurie Volk of Zimmerman Volk, who conducted the Park DuValle analysis, believes that hidden markets for traditional urbanism with the right new housing types can be identified in cities nationwide. If that is true, the demand for living in cities may be larger than anyone realizes. But it took new urbanists “thinking outside of the box” to see it.