At the beginning of a new year, it's natural to reflect on where we are and where we're going, whether it be in our personal lives or in politics, society, etc. Accordingly, two recent articles give some perspective on the present and future of real estate and housing.
In the first article, Realtor Magazine Online presents their list of the 25 hot trends in real estate. Some of the list focuses on profession-related trends in marketing and information technology, for example. But it also examines industry-wide trends in such areas as minority homeownership, modular homes, aging-in-place, and demand for office space.
Another article by Chicago Tribune writer John Handley examines the future of housing in the context of the changing demographics of the U.S.:
- Three powerful demographic forces will shape housing in the future, determining who will buy homes, where they'll buy them and what they will be like.
One demographic expert calls two of the trends the "Browning of America" and the "Graying of America." The third force will be the coming of age of the children of Baby Boomers born between 1977 and 1994 -- or Generation Y.
"Most housing growth will be driven in the future by immigrants and Hispanics," predicted James Johnson, professor at the Kenan-Flagler Business School of the University of North Carolina in Chapel Hill.
This will result in non-white residents rising to almost half of the U.S. population by 2050, Johnson said at a seminar in New York sponsored by the Urban Land Institute, a nonprofit real estate research and education organization.
The graying of America will occur as the 78 million Baby Boomers age out of the labor market, propelling a boom in retirement housing.
Just beginning is the rise of Generation Y. Also called Echo Boomers, this generation of 73 million is turning 21 at a rate of 4 million a year. Gen Y will make up 34 percent of the U.S. population in 2015, Johnson said.
It would seem that there should be increasing opportunities for niche developers to target products towards the demographic groups mentioned in the article. Each group has its own unique needs and preferences for where and how they live.
But it will also be interesting to see what effect (if any) the forces of demographic change will have on land use planning and regulation in the future. Is it possible that the momentum in the planning profession could start shifting away from the top-down, macro-scale focus embodied in regionalism and smart growth and become reoriented towards a more grassroots, community-scale type of planning aimed at meeting the needs of neighborhoods and unique demographic groups? I tend to doubt it, but stranger things have happened.
More likely, I see a huge potential for planning and regulation to place (or perpetuate) impediments that stifle the ability of various demographic groups to find housing and neighborhoods that satisfy their preferences. For instance, could zoning and subdivision regulations make it difficult for the market to respond to the desire in the Hispanic community for homes with more rooms for extended family? Also, if the smart growth planning of today continues to reduce housing affordability, how will it impact different demographic groups in the future as they try to find housing? The questions are endless.
Unless you have a crystal ball handy, stay tuned...