Sounds like one of my universities, right down to rachylou's description of the faculty members' houses. I'll also add that you will find a range of outfits from "my best decade was the 60s (or 70s or 80s)" to "I spent my summer in ____ and I've decided to dress like I'm still there" to "a serious academic wears wool regardless of the temperature" to "I like to be one with my students" to "I hiked all the way up the mountain to get here ". So, really, the only "look" that you will NOT likely find is corporate casual. With an exception for the president's wife, who will be wearing a flowered silk dress with sensible heels. The president, depending on his personal bent, will wear either a sport coat, or a polo shirt, depending on how he sees his relationship to the faculty.
My go-to, never-fail outfit for such occasions is a pair of lightweight, flowy trousers with a silk shirt (scrunched sleeves), 2" heeled sandals (but NEVER stilettos--ruins that carpet and the hardwood floors, and digs into the lawn), and a piece of statement jewelry. A white, denim jacket, to be slung over my shoulders when it cools off in the evening, completes my outfit.
Here's how I deconstruct the outfit: The trousers say I am an academic who has more important things on her mind than frivolous topics like fashion, my silk blouse says I am old enough to understand how to dress up but young at heart (the scrunched sleeves), the heeled sandals give me height and say "I am woman, hear me roar" (useful, if someone plays the academic upmanship game with me), and the statement piece says "I, too,travel and love the exotic". Finally, I find the white denim jacket adds the perfect "and I like my students" touch.
And, contrary to some of the other respondents, I'm not sure, in this situation, being too dressy is the right move. Academic environments are weird that way. I'd say pay attention to your husband. A new male faculty member who resembles a Banana Republic ad sounds pretty spot on to me.