Home seekers in the post-housing bubble era are likely to set their sights on smaller homes in urban areas, mainly to offset the rising cost of gas. In addition, reduced budgets mean that home buyers will almost certainly be looking for cheaper mortgages. This is according to speakers at the recent conference “What’s Next: Real Estate in the New Economy”, sponsored by the Urban Land Institute of Texas (ULI).
Maureen McAvey, ULI’s executive vice president of policy & practice and the keynote speaker at the event, said that her organization’s research showed that urban appeal would also go some way towards reeling in suburban sprawl, thanks to the wide availability of rental homes closer to city centers.
McAvey added: “Apartments are on the rise and homeownership is falling. In 2006 and 2007, almost 70% of people owned homes. That is now down to 66.5%, and we believe it will settle at about 63%.”
The primary allure of urban living is that doing so cuts down considerably on the time it takes to commute to work. Together with the accessibility of nightlife and weekend hot spots, living in the city makes it possible to dispense of the need to maintain a car.
As McAvey explained to HousingWire, “For every car you do not own, you save $8,000 to $10,000 a year,” a saving that allows homeowners to increase the mortgage they can realistically afford by as much as $100,000.
Smaller and urban homes are most likely to appeal to twenty-somethings and younger, married couples, says McAvey, who goes on to predict that the average size of our homes will shrink by something like 20% in the future, in order to match the smaller budgets most buyers have to work with.
Mike Wheatley is a seasoned real estate writer and senior editor at Realty Biz News with a focus on US Real Estate. He’s provided advice and information about the mortgage industry on a number of popular forums for several years now. To see more of Mike’s work, please visit his website at www.contentsolutionsonline.com.