Long-Term Housing and Demographic Trend: More Renters and Less Homebuyers (among other things) (Atlanta: apartment complex, HOA)

[aries4118]

Long-Term Housing and Demographic Trend--More Renters and Less Homebuyers (among other things):


Housing and demographic trends are changing how our cities will develop | SaportaReport#


“Between 2010 and 2030, half of all new housing will be built for renters,” Nelson said. “The net new demand will be for rental housing. We are not going to build apartments fast enough to meet demand.”
At the same time, Nelson said the nation “will see the largest glut” of houses on the market. Part of that will be due to the “Great Senior Sell-Off.” Currently, 80 percent of people who are 65 or older own their own home. But when seniors move, 59 percent become renters.
“Most states will have more sellers of homes than buyers, and that’s not a good thing,” Nelson said. “People will simply walk away from their homes — or torch them or bulldoze them.”
Metro Atlanta’s housing market, which had experienced phenomenal growth for decades, suffered more than most other markets during the recent recession. But the decline in housing values has not been uniform.
From 2007 to 2011, the average value of homes inside the perimeter declined by about 30 percent — and the intown markets are already recovering. There has been a 40 percent decline of housing values in the inner tier outside the perimeter, and they are experiencing a slow recovery.
But in the outer tier outside the perimeter — mainly in the exurban counties — housing values have dropped by 50 percent. “Homes in the outer tier counties probably will never come back in terms of value,” Nelson said.
As for the McMansions that have been built in the suburbs, Nelson said those 6,000-square-foot homes could be turned into three units that could accommodate three families.



Enjoy!

[aries4118]

The need for walkable growth near MARTA stations

[ATLTJL]

“Between 2010 and 2030, half of all new housing will be built for renters,”

I wish I had the crystal ball that this guy seems to have.

I'm pretty sure that construction permits for 2030 haven't been filed yet.

[blackhemi]

Originally Posted by ATLTJL

I wish I had the crystal ball that this guy seems to have.

I'm pretty sure that construction permits for 2030 haven't been filed yet.

Me too!

[Mishap]

^You can see plenty of that just from demographic trends. People having fewer kids means changing demand for housing. Boomers will eventually need to downsize and that will open up a lot of supply of existing homes.

Right now home ownership is in the mid ~60% range so it's not that far off to say if ownership is no longer pushed as the path to prosperity, you're going to have lower impetus to buy a home. High cost areas tend to have lower ownership rates (NYC is ~33%) and people are definitely shifting more toward cities than ever before.

The guy is a former GT professor and it's not like what he's saying isn't pretty clear. I do think developers will quickly jump on the trend and run it off its rails quickly enough. Good thing it's easier to go apt->condo than the other way around.

[10 feet tall]

Pure speculation. Atlanta may build a few more walkable areas of mixed use apartments, condos, Target's, and Cold Stone Creamary's, but it won't be the norm. The suburbs aren't going anywhere.

[BobKovacs]

Originally Posted by 10 feet tall

Pure speculation. Atlanta may build a few more walkable areas of mixed use apartments, condos, Target's, and Cold Stone Creamary's, but it won't be the norm. The suburbs aren't going anywhere.

Nope, they aren't. They're likely to see more apartment projects going in than they had in the past, but the whole "doom and gloom ending" to the burbs will never happen.

[gt6974a]

I think you'll just have more retirement areas in the burbs near downtown areas, Acworth is completing a Senior apartment complex 55+. Think it's the biggest building in Acworth now

[Mishap]

Our population is aging...fewer people having fewer kids = lower demand for suburbs. Ones in good school districts(that remain good) will still hold value but there's less market for big homes in mediocre districts far from business centers. I don't see my parents' home recovering anytime soon...it's in Snellville and the schools aren't anything to write home about and there's not a huge market for 7 bdr homes that require a lot of upkeep if the schools aren't stellar. As it is, the place is worth roughly what they paid for it in '91 and even then the # of buyers would be slim. I think they'd be best suited for a nice 2bdr condo that is of minimal maintenance so they can enjoy their travel and be closer to amenities and their grandchild. I'm sure at least a few of their neighbors are of the same mindset when the monthly $500 electricity bill rolls in. Given their sunk costs in the home, I don't see them moving for a while although the maintenance costs are ridiculous. I've considered the idea of splitting my parent's home into a multi-unit rental but I somehow think the (albeit weak) HOA would still throw a fit.

Many seniors will switch to renting or will reverse their mortgages as they age. None of that is going to help prices in the suburbs unless some homes are removed from the market. I suspect while there won't be widespread bulldozing, there will be some homes torn down when costs of repair exceed market value. I can see it in a lot of homes in Snellville/Lilburn where newer homes outclass the older ones...heinous diagonal wood siding ones that will never sell (except as rentals).

It isn't just about high fuel costs and walkability. It's about economizing and renting when it makes sense. There's far less job security/loyalty than in past generations and transaction costs of ownership aren't pretty. Going forward, his argument is 1/2 of housing will be rentals which honestly doesn't seem that far from the truth. Let's say the honest % of the population that can be trusted w/ a mortgage is maybe 60%. Home ownership hit close to 70% during the boom but a lot of those people fell out when the bubble burst. If the number of households w/ kids is 1/2 the rate of before, then there's little need for building more large homes when existing ones last quite a while and there was quite an inventory buildup in the last decade. Factor in the seniors swapping for rentals and you're pretty much down to 50% of housing demand would be in rentals.

[ATLTJL]

Never underestimate the invisible hand.

We saw it in the early 2000s. They saw more people wanted intown condos and their values were going up. So build more of them, they did! And built, and built, and built, and built!

So you know, the reverse is also true. If people want to rent, they will just build more rental units. Homeowners will become landlords and people will rent their homes. The good news is, when someone is renting property, the person who owns the property is generally making a profit. That's why rentals exist in the first place.

So worry not. Trends will do what they will. Temporarily, there will be adjustments to be made. Long term, the invisible hand will steer an appropriate response and equilibrium will always be achieved.