Total townhouse construction declined slightly on a year-over-year basis during the final quarter of 2013, per Census data of Starts and Completions by Purpose and Design.
Single-family attached starts totaled 17,000 for the quarter, compared to 18,000 during the last quarter of 2012. Over the course of 2013, townhouse construction starts totaled 68,000, just slightly higher than the 67,000 total for 2012.
Using a one-year moving average, the market share of townhouses now stands at 11% of all single-family starts, down from 11.6% for the prior quarter. The current market share is down significantly from the first quarter of 2013 (12.7%). The market share has dipped in recent quarters as the rest of the single-family market has expanded.
The peak market share of the last two decades for townhouse construction was set during the first quarter of 2008, when it reached 14.6%. This high point was set after a fairly consistent increase in share beginning in the early 1990s.
Despite the drop in market share during the Great Recession, I expect the share for townhouse construction to increase in coming years – with occasional ups and downs. For example, the market share may decline in the near term, given the ongoing rebound in the overall single-family construction sector and reduced levels of first-time homebuyers.
Nonetheless, the prospects for townhouse construction over the long run are positive given large numbers of homebuyers looking for medium density residential neighborhoods, such as urban villages that offer walkable environments and other amenities.