When the Baby Boomers were younger (1960-90), families with children made up more than 50% of all households. By the time we got to 2000 this figure had declined to 33% and by 2025 it is estimated to be around 25%.
As a result the suburban boom in housing prices that we experienced will in all likelihood slow down considerably and shift to a more urban environment. No one is predicting that suburban life is dying nor will it be replaced. Merely that as the demand cycle shifts (retiring baby boomers, different needs for Gen X & Y, rising oil costs, etc.) there will also be a shift toward different types and designs of homes as well as where those homes will be located. There are many families that will continue to prefer bigger houses and car-based lifestyles, but at the end of the day they will become a smaller group.
In Major US City Preparedness for an Oil Crisis Warren Karlenzig lists the 10 U.S. cities ranked as being the most prepared for an oil crisis as:
- San Francisco, CA
- New York, NY
- Chicago, IL
- Washington, DC
- Seattle, WA
- Portland, OR
- Boston, MA
- Philadelphia, PA
- Oakland, CA
- Denver, CO
What these cities all have in common are strong transit systems, dense city centers that are well organized, a high degree of mixed real estate uses (retail, residential and commercial), medium to high population densities and a high utilization of public transportation by commuters. At the other end of his ranking there are many cities that experienced tremendous population growth resulting in vast urban sprawl.
Home prices could be negatively impacted in some of those areas if the commute to work becomes too expensive for a large number of people. With the recent reinforcement of our dependency on oil and the recent election of Barack Obama with his “Green” focus, living patterns may also begin to shift.
Tomorrow’s successful real estate professional is the one that today becomes proactively involved in understanding these all the many trends and timely issues such as the environment, energy conservation, urban planning, green construction, the Internet, social media, etc. that impact the consumer and the home purchase transaction.
Remain current with what’s important to your business and get a copy of the 160-page 2009 Swanepoel Trends Report. The Report details the 10 most important business factors impacting the profitability of real estate professionals in the current market. |
