Glenwood Springs, CO (PRWEB) March 13, 2013
Did the Great Recession fundamentally change homebuyer’s attitudes? Will a wave of retiring Baby Boomers and the emergence of an even larger Generation-Y shift consumer demand? How will stagnant household incomes affect housing decisions?
These and other questions are addressed in a seminal new study of the Western U.S. housing market commissioned by the Sonoran Institute, a nonprofit conservation and community development organization with offices through the Intermountain West. The 60-page report focused on six communities in the region: Boise, Idaho; Bozeman, Mont.; Buena Vista, Colo.; Carbondale, Colo.; and Teton County, Idaho.
“What we are seeing is a more varied market that reflects the needs and wants of people at different stages in life, economic circumstances of lifestyle preferences,” said Clark Anderson, The Sonoran Institute’s Colorado Program Director based in Glenwood Springs, Colorado. “More and more people want convenience, they want to walk, and they want neighborhoods with character. In a lot of towns these qualities are hard to find outside of a few small, historic neighborhoods. So it’s sort of an untapped opportunity.”
Demographic and economic trends, along with changing consumer preferences all play a role in shifting demand, Anderson said, noting that the Institute’s findings are in keeping with national studies that indicate shifting home buyer preferences. For example, a 2011 survey by the National Association of Realtors, which provided inspiration the Institute’s more regionally focused analysis, showed growing demand for homes in areas with a “sense of place,” and other attributes like walkability and reduced commute time.
“Since the post-WWII era, we’ve been building housing and infrastructure that’s very suburban in character,” said Randy Carpenter, director of the Sonoran Institute’s Northern Rockies Program based in Bozeman, Montana. “The study shows there is a growing demand for something different.”
The Sonoran Institute wanted to know if national trends hold true in Colorado, Montana, Idaho, and other Western states. The Institute commissioned Economic Planning Systems, a real estate analysis firm, to assess the future of housing in six communities that are representative of the West as a whole.
“Most studies either look at specific data, usually historical market data, or they take a survey of consumer preferences. We wanted to do both, so we could understand the numbers, as well as what people said they want,” Carpenter said.
To gauge the market for compact walkable development, the study looked at the market performance of different types of residential development in six sample communities. Building permit data showed that an average of 16 percent of residential housing built in the six communities from 2000-2011 could be characterized as compact, walkable development. The study also found that homebuyers were willing to pay a premium, an average 18.5 percent per square foot, to live in walkable neighborhoods.
Andrew Knudtsen, a principle with Economic and Planning Systems, an economic firm that was commissioned for the study, said that interviews with developers and realtors helped ground the findings.
“We met with developers, brokers and lenders in each of the communities we studied to get an on-the-ground perspective. Most confirmed what the numbers were showing and thought that the market for compact walkable development is growing.”
In addition to market analysis, the study included a survey to probe what people are seeking in their homes and neighborhoods. Ninety percent of respondents said it was important to live in a place where it is easy to walk to other things in the community. Sixty-two percent would trade lot size to live in walking distance of parks, trails and recreation. Thirty-seven percent of homebuyers said they would trade single family for attached housing in order to live in or near downtown.
Other factors, like safety, value and short commutes to work, also scored high marks. However, it can be hard to find what people are looking for. Sixty percent of respondents said they had “few options” for housing in the type of neighborhood and price range they sought.
“Perhaps it’s not surprising that people in the Rockies want it all,” Anderson said. “They want privacy and a single family home, but they want to be connected to the community. They want quick and easy access to a mountain bike trail and a kayak park, and they also want the activity and convenience of being in-town, of being able to walk to the movie theater of their favorite restaurant.”
“The feel, or character, of our neighborhoods is important too,” Anderson said. “In fact, we find it’s a higher priority for people than the size of their home.”
While the market may be showing an appetite for walkability and living in centrally-located areas, plenty of obstacles remain for developers.
“These types of projects can be hard to get built, particularly if you are talking about infill and redevelopment,” Anderson said. “We talk about things communities can do to ‘set the table’ for the type of development they want. That means updating codes to address barriers, making smarter infrastructure investments, and using public-private partnerships.”
The Sonoran Institute is working with several communities in the region on projects that tackle these challenges.
To read the complete study, or related blogs, discussion, and analysis of the Western housing market, visit http://www.communitybuilders.net/learn.
About the Sonoran Institute:
The Sonoran Institute inspires and enables community decisions and public policies that respect the land and people of western North America. Facing rapid change, communities in the West value their natural and cultural resources, which support resilient environmental and economic systems.
Founded in 1990, the Sonoran Institute helps communities conserve and restore those resources and manage growth and change through collaboration, civil dialogue, sound information, practical solutions and big-picture thinking.
For more information about the Sonoran Institute, visit http://www.sonoraninstitute.org.
About Economic & Planning Systems, Inc
Economic & Planning Systems, Inc. (EPS) is a land economics consulting firm experienced in the full spectrum of services related to real estate development, including market analysis, fiscal and economic impacts, public/private partnerships, and the financing of government services and public infrastructure. Founded in 1983, the firm has four offices–located in Berkeley, Los Angeles, and Sacramento, California, and Denver, Colorado–and EPS’s team of 35 consultant services clients through the country.