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what do you all think of this article? i know it's been hashed and rehashed but seems to me like city neighborhoods that are walkable are faring better in the crash.........my niece regrets buying her mcmansion in the burbs in 2007. now she hates the isolation/commute and of course cannot get rid of it at any price in this market.
[url=http://www.nytimes.com/2010/01/10/business/10every.html]Everybody’s Business - Factoring ‘Walkability’ Into Home Values - NYTimes.com[/url]
This is one argument/debate which really can't be answered yet, and most certainly will be a local RE market factor regardless of which way trends move.
Certainly, suburbs and urban flight seem to face an uphill battle to stay relevant with demographic and societal trends over the next few decades. Specifically, they include:
1. Rise in energy costs for a home
2. Rise in energy costs for transportation/car(s)
3. Re-emergence of city as center for life beyond entertainment
4. Increase in traffic/congestion favoring mass transit or walking which favors urban cores
5. Lifestyle changes (e.g. - being able to walk to the gym vs having to drive)
6. Change in configuration/type of home for future lifestyle (less space vs mcmansion)
On paper, I think it doesn't look good for the suburbs.
However, the suburb is a uniquely American thing like Coca-Cola or apple pie. If we can find a way to make suburbs competitive with 'walkable' urban neighborhoods, people will choose the remain there.
Certain suburbs are probably doomed - the furthest out and the McMansions. They are incompatible with trends moving forward. But they aren't all the homes in the suburbs. Many will probably be divided up into apartments/group housing, IMO. People will look at them in 15-20 years and say "I can't believe people ever wanted to live in one of those giant, energy inefficient, hideous monstrosities".
So, I say it's too early to write a eulogy on the typical suburb.
Getting back on my technology and innovation high horse, if you assume the following:
1. Cars and transportation remain inexpensive regardless of oil prices as consumers rapidly move to electric, hybrid, or hydrogen powered cars in the next decade. This should make getting around remain affordable if you choose to live in a suburb and can't rely on public/mass transit.
2. Progressively businesses move towards more telework (this is already happening, but it is gradually and consistently becoming the norm rather than the exception) removing some of the strain on our roads and highways, making it easier to get around.
3. Lack of real economic recovery (see "lost decade" for the US) and redeployment of federal spending to infrastructure as the is forced to abandon its overseas wars leads to huge domestic infrastructure investment - metros in many more cities, high speed rail, rebuilt roads and bridges, more pedestrian, bike, and non-car infrastructure could make living in the suburbs and getting around without a car easier.
4. Many homes in the suburbs are upgraded, retrofitted, remodeled to be more energy efficient, making their size relative to urban type homes which tend to be smaller and have lower energy costs.
5. The end of the giant chain store with the eventual decimation of the commercial real estate market leads to a return of character in suburbs - less Best Buys, more local companies, and eventually, more character even in the suburbs.
6. Reconfiguration of larger suburbs which have seen massive growth over the past couple decades. A great example is Tysons Corner in Virginia. Tysons Corner today (construction aside) is an absolute nightmare. Too many people, too much growth and demand, too much traffic. It is being re-engineered as a suburban city center. Streets are being realigned more into a grid. Mass transit (metro) is being built through there. Everything is going green - be it streets/walkways for pedestrians or the buildings themselves. Once they finish in 10-20 years, it should stabilize all the suburbs nearby.
I don't really know anything about it, and I'm in a small city that doesnt' really have suburbs, but I do know that as we just recently house-shopped, we noticed we could buy "more" house if it was located on the edge of town/farther out from "stuff". My brother in law and his wife went for that in their own area and now commute to work, I prefer to be able to walk to things because we are a 1 car family, so we bought a house in the middle of town in good proximity to shops and stores, parks and schools, etc. We have a smaller house than we could've gotten elsewhere, but it's in a better location. It's whichever is a priority for you. Some people's priorities will always lead them to the cheaper, quieter suburbs, but as more people get sick of driving all the time it makes sense that it might be less than before.
I think it is hooey. The White House scores a 97? For who, the President himself! Every other person would have a lengthy commute to get there, a lengthy commute to get groceries or find an acceptable school. What a joke.
Sad thing is that I sorta thought the walk score CONCEPT is useful, I mean certainly there are nearly no people that enjoy having to slog great distances on a routine basis either by car or foot, but from the obvious manipulation of the folks running the Walk Score site to the association with those of questionable motives / skills (anything associated with Zillow or some never before seen "consulting firm specializing in metropolitan economies and knowledge-based industries." is HIGHLY suspect to me...) this whole thing SCREAMS of the kind of baloney that NYTimes writers and their like-thinking pals dream up ALL THE TIME to try and make their personal life style choices seem mainstream...
McMansions are not now any deader than "sustainable homes" -- fact is homes that are cheap are even pretty dead now. If you ask me to "analyze" any TWO individual homes with one being in Chicago and the other being in the burbs and I get to pick BOTH than believe me I can "demonstrate" anything you want!
Let's get a handle on reality here people -- spending on public transit is WAY DOWN because revenues that support those things are WAY DOWN, every time fuel gets expensive it costs the transit systems lots more money to run the system and rarely does the incremental boost in ridership / revenue fully cover the cost of increased maintenance that go with more riders.
The simplistic measure of taking just the mean distance from a library or coffee shop does not account for the things that happen in the real world -- that library may have reduced hours because there is a tight budget and staff is cut. That coffee shop may be closed because it is not meeting revenue targets. There are PLENTY of spots in "high density urban settings" that have a lack of anything that makes 'em desirable and the negative business climate is just as likely to precipitate cut backs in urban areas as suburban.
Further it is complete fantasy to think that Best Buy or any other "giant cain store" is nearing its end -- efficient distribution of goods at low overhead is the biggest part of their success and the relatively thin margins that they exist on are NOT going to invite small competitors to try to enter into this space. http://www.nytimes.com/2009/12/16/business/16best.html . In terms of competitive pressure the fact that BB was so much more willing to live on slim margins meant that it out lasted Circuit City and every other competitor, the shaving of margin means that WalMart is the only real bricks and mortar store that exists with the scale of Best Buy, and as WalMart's urban push swallows up more cities Daley goes to bat for South Side Wal-Mart :: CHICAGO SUN-TIMES :: City Hall (http://www.suntimes.com/news/cityhall/1945035,south-side-wal-mart-daley-121709.article - broken link) their ability to do more sales with less people will continue to negate any boost in employment beyond the construction of buildings that is a pretty minor blip ... New Study Suggests Wal-Mart's Economic Impact a Wash for Urban Communities - Chicagoist
See, it ain't that buying in the 'burbs is any worse than buying in the city, it is that with a lack of skilled work force the whole economic base of the country will likely erode.
Last edited by chet everett; 01-11-2010 at 12:09 PM..
what do you all think of this article? i know it's been hashed and rehashed but seems to me like city neighborhoods that are walkable are faring better in the crash.........my niece regrets buying her mcmansion in the burbs in 2007. now she hates the isolation/commute and of course cannot get rid of it at any price in this market.
But yea, I think that is the wave of the future. Smaller, closer, walkable is going to equal desirablility, which will mean more valuable, especially as gas prices get inevitably higher.
I think suburbs that are close to public trasportation, shopping and job opportunites will do even better though. Those few people will have the best of both worlds.
I'm a person who lives where I do in part because it's a relatively pedestrian-friendly area by modern Florida terms. And I'm still pretty skeptical of the study since I didn't really get a feel for the full methodology.
Correlation does not imply causality is one of the early lessons of a statistics class. I suspect that many of the inner ring burbs and neighborhoods with high walkability scores where prices have fallen less were strong an desirable places to live before the boom- being able to walk to the ice cream shop or coffee house is a nice little perk but the real killer apps of those kinds of older areas are generally respectable schools and reasonable commute times, and those things will continue to draw buyers when the stainless and granite is no longer quite so glowing in the 00s tract homes.
The walkable areas also were typically built out long before the crash and you don't get the downward price pressure from builders looking to somehow move new completed home stock in order to recoup some cash, even if the builder takes a loss. My area was 'officially' built out somewhere around 2004; remaining lots command a premium, and the people who are sitting on those lots usually don't have to move them anytime soon so they can hold out for their $115K sales price (current median for vacant land listings) Go to the exburbs here, and you have 12 times the number of building lots listed for sale, a median listing price of $35K, and a whole bunch of people who need to sell now, and who keep undercutting the other guy's price in order to do so.
I live in an old, "first-ring" suburb of Dallas. My neighborhood here in Richardson is decades older than some neighborhoods in Dallas itself, and is actually further south (i.e. closer to the city) than some of them. Location alone will help my house retain value in the coming years.
My part of Richardson appeals to me because there are no big box stores nearby. No Wal-Mart, no Best Buy, no Lowe's or Home Depot, none of it. The nearest Home Depot is a couple of miles away to the north but that couple of miles makes a huge difference. If I want to go to HD or Super Target, I can; they are not that far away; but they are also not right around the corner. There are few fast food restaurants and convenience stores within walking distance, too. Some of my neighbors lament this. I LIKE it. The nearest shopping center is dominated by Indian shops and most of the people shopping there do not live around here. Again, this does not bother me. Come, spend your money, then go back to Plano.
I think this area's good schools, close-in location, and strong community spirit will continue to make it a desirable area to live. I do not think it has the feel of a McMansioned-suburb. This neighborhood is full of mature trees and mid-sized (1400-2400 sq ft) high-quality ranch homes built chiefly between 1955 and 1960. Since the lots are only .25 acres on most streets, it is not an attractive area for teardowns either. Personally I think I hit the suburban jackpot.
I think it is hooey. The White House scores a 97? For who, the President himself! Every other person would have a lengthy commute to get there, a lengthy commute to get groceries or find an acceptable school. What a joke.
Actually, the article is a little misleading it isn't the white house that is ranked 97 but the whole downtown area, which is very walkable. Especially, based on their criteria close to public transport(a ton of metro stops and bus lines), grocery stores (there is a whole foods and a safeway in walking distance to much of downtown where people would actually live), restaurants, obviously museums and other attractions. Penn Quarter is a very desirable area to live in.
They gave my neighborhood a lower score than I thought they would because we could definitely live without a car. We mainly just use it to make trips out to the burbs for mostly unnecessary things like shopping at IKEA.
Anyway, I do think that in a generational since that walk ability is very important. A lot of my 20 and 30 something friends value that over having to drive everywhere you go. However, that could be self-selection working, too. As I live in city that is very focused on commutes and being able to walk places.
The most highly coveted neighborhoods in the DC Metro Area are those that are walkable.
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