|
8/11/2010 Business& Financial News, Breaking US ...
<br /> The baby boomers whose arrival kicked off the postwar housing frenzyfed this latest expansion,too.This time,they
<br /> sought space fortheir own families,said James Chung, president of Reach Advisors near Albany, New York,whose
<br /> clients include developers."Suburban developers did a fantastic job riding that wave,"he said.
<br /> _ Buttoday,aging boomers are growing outof the suburbs and their children have not yet grown into them --and may
<br /> never do so to the extent their parents did.This demographic shift,more than anything else,is driving consumer
<br /> demand for compact,walkable neighborhoods,Chung said.
<br /> Born between 1946 and 1964,babyboomers represent abouta third of the U.S.adult population,and will do so through
<br /> the next decade,said demographer Dowell Myers of the University of Southern California.
<br /> Boomers are eager to liberate themselves from the maintenance of house,lawn and car now that their children have
<br /> skipped the nest,said Mollie Carmichael of John Burns Real Estate Consulting,an Irvine,California-based firm that
<br /> advises homebuilders.Theywant necessities within walking distance because they know theywill not be able to drive
<br /> fo reve r.
<br /> After a divorce,real estate agent Kim Merrell, 51,found her ideal community in Sacramento. It has a grocer and
<br /> neighbors who go"porching"to drop in on each other and chat.A local lounge, Mix Downtown,caters to people like her
<br /> bywaiving cover charges for the 40 and older crowd until 10:30 p.m..
<br /> In Sacramento,the 55-74 age bracket will expand by 50 percent by 2020,according to the Sacramento Area Council of
<br /> Governments,which created a plan to reduce congestion and expand housing choices to accommodate that growth.
<br /> The group aged 35 to 54,which is when people tend to buy single family homes,will shrink slightly.
<br /> Of course,not everyone can afford urban life and its pleasures,especially during this period of fitful recovery from the
<br /> worst recession in nearly eight decades. Building costs in the urban core are double that of the suburbs,said Mark
<br /> Friedman,president of Fulcrum Property,a developer in Sacramento's midtown.
<br /> Developers pass those costs onto buyers. Meanwhile,the housing bust has cut the cost of Sacramento region homes
<br /> 46 percent from their peak,so suburbia is still a draw for many.
<br /> For others, it's the only option,said Henry Cisneros,the former Secretary of Housing and Urban Development who now
<br /> runs CityView,a developer of housing within the range of average families."Cities need to understand that a great city
<br /> needs a mix of housing. It creates dysfunction when workers are required to live at great distances,"he said.
<br /> But developers will make the most money building for those who can pay kind of virtue premium,they say.The gas-
<br /> sipping Toyota Prius set the precedent:people buy it despite a price tag that is at minimum $3,000 more than a
<br /> comparable conventional car.
<br /> "It's looking for the prettiest buyer,a person who is going to pay more for their car because it is important enough to
<br /> express their values about the environment,"Friedman said.
<br /> That lucrative market explains why he and others believe the potential reward in urban development is well worth the
<br /> risk."You have to be verycareful not to wind up with an obsolete business model in rapidly changing times,"said Eneas
<br /> Kane,chief executive of DMB Associates,an Arizona-based developer of upscale neighborhoods.
<br /> The firm is shifting its focus toward smart growth, including a 1,433-acre Silicon Valley-style industrial salt site with a
<br /> variety of homes,open space and streetcars.
<br /> ALL POLITICS IS LOCAL
<br /> Until very recently,a real estate agent like Merrell might have been the last person to trade the suburbs for the city.After
<br /> all,her profession had bought and sold the notion that homebuyers should stretch to invest in the biggest and most
<br /> expensive they could afford because prices could only go up.
<br /> The housing crash changed all that.Size and value were decoupled as prices fell farthest fastest in the far-flung
<br /> suburbs, said Stan Humphries,chief economist at real estate website Zillow.com.
<br /> Now citizens with real estate savvy are honing in on the cities. Unlike the suburbs,and despite the downturn,homes
<br /> closer to downtowns tended to retain their value,according to a 2008 Zillow report which analyzed the change in value
<br /> for 1.65 million homes between the first quarter of 2007 and the first quarter of 2008.
<br /> In 15 of 20 major housing markets,such as New York City but also Milwaukee,Wisconsin and Durham,North Carolina,
<br /> higher home prices correlated with proximity to the city center and its restaurants, parks and libraries.
<br /> More specifically,walking distance to those amenities generates a home price premium in the range of$4,000 to
<br /> $34,000,according to a 2009 study of 90,000 homes conducted by CEOs for Cities,an urban advocacy organization.
<br /> Americans are willing to invest in that lifestyle just as they were willing to pour money into their homes during the boom.
<br /> Residents of communities like Sacramento and Rockville are ponying up for the urban privilege of public transportation
<br /> in their own backyards.
<br /> "In one of the worst economies in a generation, people have actively chosen to raise their own taxes to support public
<br /> transportation,"said Jason Jordan,the director of the Center for Transportation Excellence,which supports ballot
<br /> initiatives that fund transportation.
<br /> http://www.reuters.com/assets/print?aid... 2/4
<br />
|