City, here I come?
This is the first in a series exploring city vs. suburb for homebuyers.
You know you want to buy a home. But where? For many homebuyers, the first major decision to weigh is city or suburb. We’ve been hearing that everyone’s moving to cities, the millennial generation (born in the 1980s and after) especially. Actually, the demographic message looks mixed. But the economic message does not. The fastest-growing cities in the United States don’t look like New York or LA or Chicago. They are less dense—and therefore more affordable for young homebuyers.
US cities are booming?
Generally speaking, suburbs have been growing faster than city centers since the 1920s, when widespread car ownership made commuting easy. But, as reported by the Wall Street Journal, recent US census data suggests an unprecedented reversal. Between July 2010 and July 2011, city centers in 27 of the country’s largest metro areas grew faster than their suburbs. Over the previous decade, only 5 metro area cores grew faster. One consequence: builders that once worked exclusively on single-family homes are now building rentals and condos in the city.
What’s this about? Some cite falling crime rates. Perhaps relatedly, there’s been a revitalization of many downtown areas. And over time, factories have moved to the suburbs, making cities less “smoky, loud, and smelly,” as the Wall Street Journal put it. (We find Times Square on trash day in July quite loud and smelly, but still, point taken.) There’s also a growing aversion to long commutes. If you’re in the millennial generation, your phone might be more important to you than a car.
However . . .
The ’burbs are back?
Others think this so-called reversal is just a blip. Consider the recession and the housing bust. If you’re a city renter, you might be staying put to ride it out. Some demographers think that city dwellers will start heading for the suburbs, per the traditional pattern, if the housing market and economy continue to mend.
Forbes cites an analysis showing that 8 of the 10 fastest-growing large counties (populations over 100,000) are on the “suburban or exurban fringe” of major metro areas. Atlantic Cities reports that, according to an analysis by the Urban Institute and researchers at the Census Bureau, growth in the “exurbs” just outside the suburban spread has far outpaced that of more densely populated areas and the nation as a whole.
The fastest-growing cities look kind of like . . . suburbs
And then there’s this: All 10 of the fastest-growing metro areas are located in Sun Belt states, especially the Southeast and Texas, Forbes reports. Just for example, Raleigh’s population has exploded—up nearly 48 percent since 2000 for almost triple the growth rate of the 52 largest metro areas. Other fast-growing cities include Austin, Las Vegas, and Oklahoma City. Sun Belt cities also have high rates of growth in the population under age 15 . . . Hmm. Perhaps people are moving to these cities to have children?
That makes sense when you look at what these cities have in common. First, many are experiencing more economic growth: jobs. But also, they have relatively low population densities. You might say they are a bit less city-like. Housing is more affordable relative to income.
“Cool” cities like San Francisco are great, and of course there’s no place like the Big Apple—Times Square on trash day in July notwithstanding. But can you buy a home (or event rent) there and have kids someday? The answer, for many, appears to be no.
In future posts, we’ll take a closer look at city vs. suburb through the eyes of homebuyers and homeowners.