Trends We Are Watching
- The residential housing market is stalling; and perhaps non-existent for homes priced in the top third of the market;
- Public funds for roadway expansions are going to become harder to come by;
- There is and will continue to be an over supply of low density fringe suburban homes (exurban);
- Baby Boomers and their children are showing a desire to downsize and live in walkable closer in communities with mass transit options, with no let up in sight at least through 2025;
The Brookings Institute published a well reasoned article recently entitled The Next Real Estate Boom. The authors raise the above and several other facts which lead them to the conclusion that inner ring communities and suburbs will see a quicker stabilization of real estate prices and development, long before the exurban areas of our metropolitan markets.
So, how can developers and real estate professionals respond to these trends ?
- Advocate for more and better public transportation options;
- Find ways to promote alternative energy and power options (charging stations);
- Enhance walkable communities through intelligent residential and commercial development.
One statistic mentioned by the authors is that when a household eliminates a car from its budget the household can afford an additional $100,000 in mortgage expenses. This statistic alone should be enough to motivate governmental bodies to create incentives for taking advantage of these trends. According to the authors, transportation policies drive development activity.
As a real estate agent in the Cincinnati area, I have recently had a lot of clients wanting to downsize to move back to more "walkable communities". Very interesting.