With buyers coming to market en masse, cities and neighborhoods are looking to attract new residents, whose spending, and property tax income could benefit the areas they live in. But housing has become more competitive, with detached and attached housing inventory lower than one year before, contracts written significantly up than one year ago and closings occurring at a higher rate as well. This has become a seller’s market in some areas, having buyers question options, necessities and various factors – one of the most common is to whether to live in the city or suburbs.
Decades ago, there was a large movement into the suburbs. Homes were typically more affordable and larger, and in affluent suburbs, better public schools versus private education. However, the trend has slowly reversed as new search criteria for home buyers have changed in recent years. Buyers have decided to trade driving commute times (which have additional concerns such as traveling cost/maintenance, time lost, health and stress), for urban walk-ability and public transportation. They look for neighborhoods that are near public transportation, shopping, retail and neighborhood amenities. Start up companies like Zip Car (recently acquired by Avis) provide automobile options for urban dwellers who choose not to own a vehicle.
Many buyers are also looking for smaller spaces, a contrary trend from buyers from a few years ago who sought larger homes. Efficiency, energy conservation and mobility (smaller homes and condos may prove easier to rent than larger homes that have a smaller pool of viable tenants and increased costs for maintenance and vacancy).
In Chicago, there has been a flurry of tech companies moving into office spaces throughout the city, attracting new residents, job seekers. The city will need to invest significantly into its infrastructure to keep housing affordable, attractive and to support a larger population. Schools, public transportation and strategic neighborhood zoning and growth will be essentially vital to keep neighborhoods thriving.
Where does this leave the suburbs?
In contrast, suburbs will need to take a different path. In some cases, large companies are unable to move into city centers, due to cost, talent and space requirements. In these instances, companies and organizations will need to work with local suburbs to build smarter campuses / communities. Abbott Laboratories’ campus is almost a city within itself, offering many options for their employees.
Retail spaces and shopping centers will have to reexamine their strategy, to prevent retail vacancies. Builders in key areas will look to analyze current trends of housing and perhaps provide more options, including smaller homes for potential buyers.
Sherwin L. Sucaldito, REALTOR®, GREEN, ABR, CRPM
The Institute of Luxury Home Marketing
Green REsource Council, GREEN
Accredited Buyer’s Representative , ABR
Certified Residential Property Manager, CRPM