Trendy neighborhood and nightlife, or picket fence and easy parking? While American homebuyers continue to ponder the perennial question of where to settle – city or suburbs – the lifestyle, demographics and amenities of each are changing as well.
Here’s a closer look to help you decide where you want to live.
Americans have migrated en masse from the cities to the suburbs for decades, but the exodus has reversed in recent years, according to recent Census data. More than half of the country’s 51 largest metropolitan areas reported faster growth in city centers than suburbs from 2010 to 2011, and 19 of the 51 major metros showed faster primary city than suburb growth in 2012-2013. That’s up significantly from 2000 to 2010, when only five city centers grew faster than their surrounding suburbs.
“I think there are always going to be people moving to the suburbs,” says John McIlwain, senior fellow for housing at the Urban Land Institute, a nonprofit research and education group for land use and real estate. “We’re not talking about a black-or-white situation, but the great migration to the suburbs is over. We’re now seeing incrementally more people living in either central cities or newly evolving suburban town centers.”
Cara Ameer, a Realtor and broker associate with Coldwell Banker Vanguard Realty in Ponte Vedra Beach, Florida, has noticed a renewed fascination with cities in her clients. “First-time homebuyers tend to want to be in more in-town areas,” she says.
The top reason that suburbs continue to be attractive to homebuyers comes down, unsurprisingly, to costs. The main advantage of the suburbs is that housing per square foot is cheaper. Most suburbs offer bigger houses and more land.
Homes in the city do tend to offer “less bang for the buck,” Ameer says, because the limited space is more expensive. However, both Ameer and McIlwain point out that homes in urban markets might appreciate more than their suburban counterparts. McIlwain says prices in urban markets dropped less and rebounded faster in recent years.
“I think cities and denser areas tend to retain their value a little bit more because it’s more expensive,” Ameer says. “It’s more cost-prohibitive to get in, versus suburbs, where the affordability factor is widened and it’s typically easier for more people to get into that area.”
“People always said the reasons these [homebuyers] were going out to the suburbs were the same ones their parents had,” McIlwain says. “But the suburbs today are not the suburbs of the ’50s and ’60s.”
The biggest demographic groups headed for cities are empty-nesters and millennials, or those in their 20s and early 30s. “Many of them want to find ways to stay in the city after they get married and have kids,” McIlwain says.
Schools and safety are two big factors in choosing where to live, and those statistics are changing, too. Not all suburban schools are high-performing, and city crime rates have seen reductions in the last few decades.
With so many different choices, Ameer reminds her first-time homebuyer clients to be flexible and weigh their needs versus their wants. Buying a property needs to be a compromise, she says.
“This is not a forever property, remember that,” Ameer says. “Get into something that makes sense for you financially and fits your lifestyle. As your life evolves, you can make the next step.”
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