Monday, May 13, 2013
What is Really Driving Neighborhood Change
I am sitting in a coffee house early on Sunday evening in an Atlanta intown neighborhood called Virginia-Highland.
This is where I lived for10 years before selling my house and moving into the Brookhaven neighborhood about 4 miles to the north.
When I purchased my home back in 2001, the neighborhoods was one of the true hip and hot Atlanta ‘hoods.
Homes were being renovated, new indy coffee houses were opening up and fun, funky retail sores were staying packed well into the evenings.
While not all, much of the renovation and new retail moving in was being birthed by the Atlanta gay community and bohemian couple-hood.
It was truly a fun neighborhood to live in back then.
Now as I sit here, I cannot overlook what some refer to as the “breeders.”
Not only have the “mom & pops” pushed out the true mom & pop shops, but they have changed what had been cool to what is now true Gen X cocoon heaven.
When I walked into the coffee house tonight, I was notified that the place would be closing down at 8pm.
“After all, tonight is a school night when parents need to spend time with kids doing home work.”
Neighborhoods do indeed change.
On the drive over here I passed by a real estate office.
They had a sign out front stating that there is a shortage of homes to sell and if a person lists one with the firm today, they would get a rebate on the commission to sell it.
In fact, that sign is communicating something that is hitting the home page of the news websites and the top news stories on the digital television sets.
There are now more folks looking to buy versus folks seeking to sell.
The news media talks a lot about the impact of economic recovery.
Yet, what is really driving real estates sales is more an affect of a generational change wave than true economic recovery.
No question that corporate career mobility is no longer dependent on where people physically reside. Thanks to the Internet, people can work from virtually anywhere.
Physical flexibility is freeing up many businesses to adapt more quickly and operate more flexible than the past… and that’s a very good thing.
Another factor at work is that so many home-owners are still faced with appraised value of their homes and larger mortgages that they owe.
The cost of real estates still has not recovered to pre-Great Recession price points and many of today’s homeowners purchased their homes with little-to-no down payments.
And then there’s the generational shift that’s taking place that the media simply overlooks in what they report.
The Millennials are now entering into the nest-forming life-stage.
With more and more of the Millennials entering into their 30-something years, owning a home is their #1 goal… much more important than corporate or career commitments.
Some of the folks that I present this information to quickly come back and say that many of the homes that are selling are 3+ bedrooms in size and conclude that first time home buyers are really not what’s driving home sales.
As I share in this blog, at least once a month, I try to get out on the streets and talk with audience groups. Dwelling behind the walls of an office quickly generates a very restrictive viewpoint of the marketplace at large.
About two weeks ago, I interviewed about three-dozen Millennials about their house hunting journeys.
Many of those I interviewed not only talked about their goals of finding a home they could call their own and “sinking down roots,” but they also talked about finding a home that they could “grow into” over time.
A side observation… they didn’t seem to have too much of an issue with rooms sitting empty in the home right now… as long as they had space over time that they could make use of versus having to go back through the home buying search all over again.
Millennials do not plan to engage in the home search again when they decide that they are ready to make the $1 million investment in birthing a kid.
Other business folks I talk with still hold onto the belief that once the first time homebuyers elect to have kids, they will move out to the ‘burbs.
Whether it’s the frustration of the home buying and banking game or the frustration of engaging in commute traffic, Millennials are very reluctant to consider any move further out into the ‘burbs.
If in reading this blog you become more fascinated about the driving force of new home sales, I encourage you to spend time watching the HGTV, DIY, TLC, BRAVO and Food Network neighborhood, real estate and home design shows.
The vast majority of those shows center on the Millennial home-buyers.
Part of the commentary Millennials make when working with their living space is driven by a high level of expectation that what they see in home looks like what pops up on their mobile version of Pinterest.
Other commentary is driven by what all they believe can be down with a visit to IKEA or the neighborhood flea market.
Neighborhoods do indeed change.
But so do the dynamics of the generational group moving in.