A recent study shows that new homebuyers are finding small living spaces in urban areas more attractive than in previous years.
According to an article by Housing Wire the Urban Land Institute of North Texas’ executive vice president of policy and practice, Maureen McAvey, shared some of their findings at the “what’s Next: Real Estate in the New Economy” conference.
McAvey attributed the desire for a small home in an urban or suburban area to several factors including the high and continually rising price of gas and the appeal of being located closer to trendy weekend getaways with exciting night life opportunities.
According to the article the availability of public transit can save you quite a lot of money which is very appealing to younger buyers in tough economic times.
“For every car you do not own, you save $8,000 to $10,000 a year,” McAvey said. “That can often increase the mortgage you can afford by $100,000.”
Urban areas also have a much broader range of rentals and apartments than in rural areas.
“Apartments are on the rise and homeownership is falling,” McAvey said. “In 2006 and 2007, almost 70 percent of people owned homes. That is now down to 66.5 percent, and we believe it will settle at about 63 percent.”
Due to the tough economy the next generation of homebuyers will most likely have smaller budgets to work with and will stay in their homes for longer periods of time than in past generations. The 4.3 million members of the generation that turn 22 each year will have a difficult time getting one job and an even more difficult time finding a second that could lead to relocation, according the study findings.
According to MSN Real Estate news homebuyers wanted bigger and bigger houses for about 35 years. The growing square footage average grew all the way to 2,277 square feet in 2007 and since then has been slowly shrinking back. Americans look at big houses as big utility bills they say and in this economy it just isn’t an option especially for people who are looking to buy their first home.