A major U.S. homebuilder is doing its part to address housing affordability concerns with plans for houses in the Florida Panhandle priced under $200,000.
But Century Communities' cottage-like homes do come with caveats.
The homes will be in rural Walton County, Florida, and contain a maximum 1,272 square feet of space.
They will be priced in the $190,000s. According to the Florida Realtors trade group, that's less than half the county's year-end median price of $406,673 for existing single-family homes.
In recent years, record U.S. home prices and elevated mortgage rates near 7% have crimped consumer budgets, putting homeownership out of reach for many. Some people are gravitating toward new construction because homebuilders can offer sales incentives, unlike individual sellers of existing homes.
Century said the 19 homes are located throughout the DeFuniak Springs area, about 65 miles east of Pensacola. Nearby landmarks include the 260-acre Chipley Park and Ponce de Leon Springs State Park.
Sales started in early February, according to company spokesperson Laura Leitner. The concept can be adapted in larger cities, she said in an email.
Affordable options
"By utilizing smaller lot sizes and efficient layouts, cottage-style homes can help expand affordable new construction options in urban areas, offering a balance of comfort, quality, and attainability for homebuyers," Leitner said.
The properties could appeal to workers in Destin and other pricey Florida resort towns about an hour south of DeFuniak Springs, said Justin Benefield, a finance professor at Auburn University and academic director for its Winchester Institute for Real Estate Development.
"It's an interesting geographic choice, but I like the idea," he said in an interview. "You have people in Atlanta who drive an hour and a half into work every day and think nothing of it."
In addition to building in a rural area with lower land costs and offering small floor plans, Century is likely capitalizing on the high density of 10 to 12 units per acre to make the homes less expensive, according to analyst Brad Hunter, head of Hunter Housing Economics in West Palm Beach, Florida. It's something more builders should consider in bigger cities if zoning laws allow, he said.
"It behooves builders to look for ways to deliver a single-family living experience for less money," Hunter said in an interview. "A small, cottage-style home development such as this fills that bill."
The homes will contain two or three bedrooms and such features as vinyl plank flooring and granite countertops.
"DeFuniak Springs is brimming with classic Florida charm, and that's what these modern cottage-style homes are designed to complement," Century Executive Vice President Dave Roberts said in a statement.
Century Communities, based in Greenwood Village, Colorado, is the nation's 10th-largest homebuilder, according to the latest rankings from Builder magazine. The company builds in more than 45 markets in 17 states.