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Current Buyers Seem to Prefer Downtown Versus Suburban
A spacious home in a suburban area, with a large yard where the kids can run and play — that was the dream of most families a few years ago. But that demographic trend has changed dramatically.
Increasingly, a key housing demand today has moved downtown, where homeowners can walk to their point of employment, shopping or sports-entertainment venues. Long and very expensive commutes are out.
Walking is in — the cool way to get to work and reach other destination points. Or at least they want to be close enough to use mass transit systems.
Those downtown area homes, often condos or townhomes, are particularly appealing to young professionals. Many of those households have no children, and many are singles. In fact, one-person households are now almost as numerous as families with kids, according to one report.
“Recent market research indicates that up to 40 percent of households surveyed in selected metro areas want to live in walkable urban areas,” said Christopher Leinberger, a professor at the University of Michigan and a fellow at the Brookings Institution.
The changing demographics we're seeing today reflect a major shift in the way an increasing number of Americans — especially younger generations — want to live and work, Leinberger said in a CNN report.
The trend, sometimes referred to as “the new urban movement,” started to gain momentum in the mid-1990s; however, it accelerated in recent months and years as energy costs soared. Many suburban areas became blighted by unoccupied and rundown homes that have been foreclosed.
In the 1940s and '50s, the rush was to flee the big city and establish a nice quiet home in the suburbs. Today, the direction has reversed. People are returning to urban centers. But it should be noted that a significant proportion of home buyers still opt for a residence in a suburban area.
The movement in housing demand in downtown areas has contributed to the current oversupply and reduced values of suburban area homes, and the increase of demand and values for urban residences. Developers are trying to satisfy the growing interest by building new high-density projects in downtown areas, or converting old buildings into modern condos, but this type of development is often slow to materialize, due to government policies and local zoning laws.
In a recent survey conducted by Coldwell Banker Real Estate, about 78 percent of their Realtor members reported they are seeing more interest in urban living because of the high cost of gasoline.
“Urbanization is a largely positive trend,” it was noted in a report carried in Urban Land magazine. “It is kinder to the Earth's ecology to house large populations in compact urban areas than to spread them out across the countryside.”
Q: Are young home buyers being squeezed out of the housing market?
A: No, in fact they are a viable home buying segment in today's market. Young individuals and couples still in their 20s are the focus of intense marketing effort by home sellers, Realtors and builders.
Why the new interest in this home buying market demographic segment? These young business and professional people are often well-educated and are making good incomes, thus can qualify for a sizable mortgage loan. Also, in many cases they are first-time buyers and not burdened with another home they must sell before buying a new one.
Selling a home to these buyers is often quick and relatively easy, due to the lack of problems often associated with older buyers. It's a segment that's particularly appealing to professional home sellers in today's generally sluggish sales market.
However, these young buyers sometimes have their own baggage to deal with. They might have minimal credit history, and that's a concern to mortgage lenders who scrutinize applications intensely in today's market. Also, many first-time buyers in their 20s have sizable student loans and credit cards they are paying off.
Q: Are many empty-nesters reluctant to move to a smaller home?
A: Nearly a third of empty-nesters — couples in middle age or older — are making upgrade changes in their existing homes as opposed to selling their home and moving into a smaller home, a condo or apartment, according to an AARP survey.
In some cases, this includes major remodeling projects, preparing for their special needs in retirement living.
“AARP's survey indicates that Americans who are 45-plus are not looking to downsize or leave their current homes as they prepare for or enter retirement,” said Elinor Ginzler, AARP senior vice president. “They're fixing to stay, improving their homes in order to stay there longer and overlooking the drop in home values. Call it cocooning or nesting, boomers and their parents are digging in and staying put.”
The survey indicates they are not worried about losing their homes, but are concerned about the effects of the housing slump and foreclosure crisis on their neighborhoods, as expressed by 64 percent of respondents. And the economy is a primary concern (89 percent).
Yet another key concern is the risk of more crime in areas with high numbers of foreclosed homes, indicated by 69 percent of respondents.
To find out more about Jim Woodard and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.
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