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Real Estate

Remolding the map

Shifting demographics fueled by changing desires create a new real estate reality

Some families choose to hunker down, hibernating in the same grounded location for the rest of their lives. Others are floaters. They elect a new journey — one that involves moving. And lots of it.

Life-changing events involving family, college and careers are the chief drivers of the when behind a decision to live in either a bigger or a smaller place, says David Plane, a professor of geography and regional development at the University of Arizona.

But a desire to move is just the first step in the process: People are also faced with the prospect of 50 states — and, in between, thousands of cities of varying sizes.

“While home to more than eight out of every 10 people in the United States, metro areas cover only a little over one-quarter of the U.S. land area, with micro areas accounting for somewhat more than one-fifth of the total,” according to the 2010 Census special report, “Patterns of Metropolitan and Micropolitan Population Change.”

It may seem like a rather nebulous point, but over the years there has been a consistent shift between urban and rural cities.

“For several decades now, cities in the United States have wished for a 24/7 downtown, a place where people live as well as work, and keep the street busy, interesting and safe at every time of day,” Alan Ehrenhalt wrote in his book, “The Great Inversion and the Future of the American City.”

First things first: Over one out of every 10 people in the United States live in the two largest metro areas, New York and Los Angeles. Plus, almost 30% of the U.S. population resides in the 42 metro areas with populations between 1 and 5 million, according to the census report.

In short, people are uprooting to the cities. Not much of a surprise in that statement, some might say. But where and what type of cities are becoming the real focus.

While bigger metro areas experienced the most growth, it was not necessarily the largest cities within them. The six largest cities — those containing 5 million or more residents — grew at 6.2%. This is compared to cities of 2.5 million to 5 million in size, which grew at 13.6%.

Additionally, metro areas with 1 million to 2.5 million people experienced a rate of growth above 12%, whereas those with populations of 500,000 to 1 million and 250,000 to 500,000 had similar rates of just under 12%, the census report found. The inference here, then, is a shift toward suburbanism.

Baby boomers

Baby boomers were raised in the suburbs of the big cities. They craved the country and small communities, but they needed to be in big cities in order to be near their jobs. Once they retired, they tended to leave, Plane explained.

These days, people are looking at homes with big-city characteristics that may not be in the center of town. In other words, they tend to float toward the smaller, suburban cities.

“For 2010, the percentage of the population living close to city hall — downtown — varied inversely with total population size. Metro areas with populations of 5 million or more had smaller percentages of their populations within 2 miles and 2 to 4 miles from city hall than did smaller metros,” the census report said.

Instead, explains Jeff Dworkin, president of JLD Custom Homes, people now want to have a yard for a dog, for example, or they want to be closer to their place of employment. He is also seeing a strong demand for people who want to walk to restaurants and shop.

“A lot of stuff has been cleaned up, making it very enticing for younger folks,” Dworkin added.

“The problem for major cities in the coming decade will not be finding people who want to live in the center. It will be finding places to accomodate them, Ehrenhalt said.

Plane, the professor, goes further. “Right near downtown is way beyond people’s affordability. The thing about the center point is that there is not much land. The area increases as you go away from the center,” he said.

For Plane, the end result is a shifting map that sees people migrating toward suburban cities or cities with more land.

“In the Portland area, there is this new suburbanism going on. Satellite communities with their own downtowns and pubs connected by bicycle paths and stuff,” Plane said.

He points to cities such as Dallas, oft-studied since there is so much available — and affordable — land within its confines.

Dallas-based Dworkin says he is seeing a growing demand in suburban areas for larger patios but smaller, low-maintenance

backyards.

It is becoming more common to find buyers who would fall under the dual-income bracket and who have no kids. The result? Builders are designing houses with a higherend finish, explains Dworkin.

There is method is this apparent shift: Dworkin says it’s down to the fact people want to entertain friends more often, and they want a house built for this purpose.

Downtown lockout

The picture of the future for downtown looks uncertain. In his book, Ehrenhalt cites various factors that could hinder people from moving in its direction. One main issue he brings to light is what young adults will do once they have kids.

He noted that in Dallas, for instance, he is seeing a lot of families send their children to notable private schools. For now, Ehrenhalt points to rising gas prices as a possible trigger for greater city demand. Although some may continue to budget for that expense, Ehrenhalt predicts there will be a group of people who choose to shift to the city.

Yet, there is no abandonment of the suburbs in favor of the city all at once, Ehrenhalt explained. While the census data showed people relocating to metro areas, the pace is still relatively slow.

In general, cities have evolved from places to which people commute every day to situations that are closer to areas of mass residence. The shifting preferences driving this movement will be sure drivers of future housebuilding trends.

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