Buyers Look to Smaller Towns and Cities for Real Estate
The country seems to have come to a pair of conclusions in the wake of the prolonged housing slump that do not necessarily cover the full range of options on which way the market will move. Under the first consideration, critics surmised that the nation’s long held ideal of single family home ownership had become an idea whose time had passed. Citizens would no longer cherish the notion of owning a home. The second conclusion held that the country’s love affair with suburbia was also kaput. From now on the trend would be towards a more urban lifestyle where jobs, shopping, and entertainment would all be within walking distance or at least easily accessible through mass transit.
A third way may now be in the process of unfolding. Small cities may be the next big thing when it comes to housing. They offer a combination of the convenience found in urban centers along with the tranquility found in suburban zones.
The rate of home ownership among the population at large peaked at 70% back in 2004. It has come down to around 65% of late. This hardly means that Americans have given up the dream of home ownership. Rather it reflects a return to the historical norms of the housing market before the recent bubble inflated the ownership percentages. While that percentage may continue to decline in years to come as the economy struggles to gain traction, that does not mean the desire for home ownership is fading. That being the case, home ownership should remain at least as high as it is now once the recovery is fully realized.
Small Equals Big in Value
There is no evidence the Millennial Generation has turned its back on the notion of owning a home. According to a recent study, some 84% of people in the 18 to 34 age bracket hope to some day own a home. The question becomes where will they decide to buy? Mid sized cities particularly those close to major metropolitan areas may be the best option available. Cities such as Austin, Texas and Rochester, New York rank high on this list. Cities such as Boulder, Colorado and Madison, Wisconsin will also benefit because of the large universities they contain.
Suburbs and outlying areas around large cities such as Los Angeles and Chicago have sprawled outwards because of the large numbers of jobs being generated in such locales. The high cost of housing in these places often drives newcomers to far flung communities in search of affordable housing. Increasingly, jobs are following them to the outskirts, and many companies are now setting up shops in the smaller satellite cities in order to take advantage of the lower prices for property.
Eventually these trends may balance out as both companies and the employees that work for them seek to live close by one another. The simplest way for both to do this will be by living together in the same smaller cities. People will live and work in the same compact region.