Charlottesville has always been a bit of a transient market, and this recession is creating some significant shifts in the demographics of buyers, shift I’m trying to figure out now rather than later.
– Younger people are choosing to rent rather than buy, as they have neither the desire nor job stability to to purchase. Put simply, many don’t know where they’ll be in two years and don’t want to be saddled with a house.
– I’d wager a large percentage of the population has been turned off of homeownership, for all the obvious reasons.
– “Active adult” communities in Charlottesville are few and far between, but The Lodge in Old Trail (in Crozet) looks like it may be poised for success.
– What will the landscape look like in thirty or forty years when these now new developments (I am reluctant to call some of these new incarnations â€œneighborhoodsâ€ just yet) start to experience their own turnover? Who will buy these houses?Diana Olick ponders much of what we’ve been seeing in the Charlottesville MSA:
We’ve also talked a lot about the surge in renting; we’ve blamed it on the housing crash, fear of buying into a depreciating market and the tight credit conditions that are pricing many potential buyers out.
Perhaps there’s more to it than that as well. Perhaps with fewer large family households and less desire for a big space, smaller, full-service rental apartments are more desirable to a growing segment of the population.
“Family households are more likely to stretch for size over location. Non-family households are more likely to value locationâ€”proximity to work, entertainment, etc.â€”and then size. They are less willing to commute than a family household,” noted Porter.
We also have to look at the growing population of Americans who intend to “age in place,” that is, the baby boomers who are moving out of the big family homes but not into what we used to call “retirement homes.”
And she closes with the question I’ve been wondering for years:
When you couple that shift with a much-changed mortgage market, one that prices so many more Americans out of larger, move-up homes, you have to be concerned about what happens to the stock of larger homes, old and new. Do we see huge price reductions as demand falters?
An enterprising real estate developer will be making plans. Now.