The Urban Land Institute predicts there will be two major changes beginning in this new decade that will affect the housing market across the nation. We can be sure that we’ll also see these changes take place in our local Denver housing market.
- The first change is that home appreciation will slow. The report predicts annual appreciation between 1-2% each year.
- The second change is that by the end of the decade, the now record-high U.S. homeownership rate will decline by 7%, from 69% to 62%.
According to the report, four other demographic trends are also likely to have an impact.
- Aging baby boomers, those 55 to 64 years old, will keep working, and, some may stay put in their current suburban homes until the values recover. Those in this group, if they do move, will look for comfortable, easy homes (first-floor master bedroom), but they’re expected to be looking for mixed-age living environments that cater to active lifestyles.
- Those between the ages of 46 to 54 years old, while in their prime earning years, they lack home equity and may not be able to afford second homes (unlike the older baby boomers).
- There are approximately 68-million people that make up Generation Y (less than 30 years old), but they are typically less interested in homeownership than other age groups. Whether it’s by choice or by necessity, this group is more likely to be renters and not homeowners. Not surprisingly, this tech-savvy group places high value on communities—real and virtual—where information and ideas can be shared. This group also likes walkable, close-in communities that are typically close to downtown. Another big draw—“net zero energy” homes—green and powered exclusively by alternative energy.
- Immigrants are the largest contributing factor to population growth in the US. This group is often attracted to multi-generational housing in areas that have a strong sense of community. So, larger homes are preferred by them, if they are able to afford them.
All of the report seems to point to the need for suburban development to adapt to these demographic trends, or risk becoming obsolete. Overall, the lasting stability of the U.S. housing market, seems to depend most on the structure and revitalization of the private home mortgage finance system - which will require re-establishing a strong private mortgage market that avoids past abuses. Based on this report, it seems clear that the next decade holds plenty of challenges, but if we’re paying attention to them, the housing market will evolve and thrive.
Whether you’re in the market to buy a home or sell a home in the Denver area, you want to be sure you’re getting the best value, so let the Bandy Team guide you through the entire process. We are equipped to help you find the right home in the Denver metro area at the right price, as well as in many other communities along the Colorado front range. Give us a call!
Marianne Bandy
Check out Homes near Fitzsimons in Aurora
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