Although we are still bouncing off the bottom of the residential real estate cycle, there will be a recovery at some point. Where will it come from and what will drive it? The Brookings Institute released a report recently exploring what might drive the next boom in real estate. Their answer: walkable cities.
While the decline in far flung suburban living has been on the decline at least since the spike in gas prices in the mid-2000s, they see that trend accelerating during the next real estate cycle due to Boomer demand for smaller, easier to manage living and the Millennial’s penchant for city living:
Their aspirations have been informed by Friends and Sex in the City, shows set in walkable urban places, as opposed to their parents’ mid-century imagery of Leave It to Beaver and Brady Bunch, set in the drivable suburbs. Not surprisingly, fully 77 percent of millennials plan to live in America’s urban cores. The largest group of millennials began graduating from college in 2009, and if this group rents for the typical three years, from 2013 to 2018 there will be more aspiring first-time homebuyers in the American marketplace than ever before—and only half say they will be looking for drivable suburban homes.
The report recommends a re-evaluation of both local and federal rules that drive traditional suburban sprawl development in favor of compact, mass-transit focused smart growth.
Looking for more information on Smart Growth and what it might mean to you? Check out NAR’s Government Affairs’ Smarth Growth webpage.