Is the suburb finished?
The latest census data show that Americans are leaving the far-flung suburbs to live in and around more urban areas. Could this finally be the end of sprawl?
By Teresa at MSN Real Estate
New census data tell us what we have been hearing for months: Homebuyers and renters are bypassing the exurbs and choosing instead to live in urban centers.
"There's a pall being cast on the outer edges," John McIlwain, a fellow at the Urban Land Institute. "The foreclosures, the vacancies, the uncompleted roads. It's uncomfortable out there. The glitz is off."
According to census estimates released today, the number of Americans living in exurbs grew just 0.4% between 2010 and 2011, compared with a growth rate of 0.8% for cities and their surroundings. That compares with 2.1% growth for far-flung residential areas in 2006, when cities reported population losses of 0.2%.
All but two of the 39 counties with more than 1 million residents gained population between 2010 and 2011. The two exceptions were Wayne (Detroit) and Cuyahoga (Cleveland).
Twenty-eight of those big counties grew faster than the national average and accounted for one-third of all U.S. growth. Those counties accounted for 27% of U.S. growth during the boom.
Ninety-nine of the 100 fastest-growing exurbs and outer suburbs saw slower growth or no growth in 2011 compared with during the boom (the exception was Spotsylvania County, Va., outside Washington, D.C.). Almost three-quarters saw slower growth in 2011 than in 2010.
The decline in popularity of outlying areas has been influenced by the rising cost of gas, the steep decline in property values, the deterioration of some exurbs and the preference of Gen Y and baby boomers – the country's two largest demographic groups – for more urban environments.
"The heyday of exurbs may well be behind us," economist Robert J. Shiller, one of the creators of the S&P/Case-Shiller housing index, told AP. "Suburban housing prices may not recover in our lifetime."
Buyers want smaller homes and urban life
Not everyone is ready to write the obituary for the sprawl into the exurbs.
"Sprawl is the Freddy Krueger of American development," Robert Lang, author of "Megapolitan America" and an urban affairs professor in Las Vegas, told USA Today. "It's always pronounced dead and yet somehow springs back to life."
Is your suburb the next slum?
Once the symbol of the American dream, many suburban communities could be on their way to becoming tomorrow’s slums.
By Melinda Fulmer of MSN Real Estate
The nation's suburbs — once the symbol of the American dream — are well on their way to becoming tomorrow's slums, some experts say.
The one-two punch of a crippling recession and higher gas prices have quelled demand for many of the nation's fringe communities from Charlotte, N.C., to Sacramento, Calif., while at the same time demographic trends have begun pushing an aging population back to the nation's urban cores.
That's prompting some planners to predict a huge surplus of large-lot suburban properties in the years ahead — as many as 25 million homes by 2030, according to Arthur C. Nelson, presidential professor of city and metropolitan planning at the University of Utah and director of its Metropolitan Research Center.
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Not all of these homes will sit vacant, Nelson says. Many of them will be divided up into multifamily rental properties.
"You will have two or three households living in these large mansions in the suburbs," Nelson says, adding that this will bring property values down and put extra strain on public services.
Suburban ground zero
That's already happening in places such as Elk Grove, Calif., a community 15 minutes outside Sacramento. Here, builders rushed to build subdivision after subdivision — putting up 10,000 tract homes in just four years at the height of the boom — confident that buyers from all over the Bay Area would trade up to these larger homes.
They were wrong. When lending dried up and the economy soured, the bottom fell out of this market, even before all of the schools, parks and fire stations were built. Property values plummeted and many people walked away from homes they thought would never recover their value.
What’s out there? Homes under $250,000
Date:6/10/2011
TODAY real estate contributor Barbara Corcoran
Susan McDonald, founder of Elk Grove's Franklin Reserve Neighborhood Association, saw her old house in the neighborhood drop in value from about $550,000 at the peak to $230,000 when it sold again recently. (She bought again in the same area.)
Many of the houses still sit empty, or have been rented out as Section 8 housing. Many of the lawns are brown and weedy. Graffiti are starting to crop up on walls and signs throughout the area. Sheets, not curtains, are tacked up in some windows.
More alarming, property crimes in Elk Grove — such as burglary, larceny and motor vehicle theft — soared tenfold in the first six months of this year from the same period in 2007. Violent crime is on the rise, too, jumping 18% in that same period, according to reports by the Elk Grove Police Department.
Now, McDonald's group and a local church are spending weekends mowing yards and cleaning up what banks and builders will not. They tip off police about suspected pot-growing houses; 32 have been found since her association was formed a couple of years ago.
"We're not going to let our lawns go, let people park their cars all over the lawn and let kids hang out on the streets past (the town's) curfew," McDonald says. "We are going to preserve our quality of life."
The real cost of suburban life
The suburbs, experts say, are actually more costly than people realize, which means they’re not even a good option for most lower-income families looking for a better life.
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As the price of gasoline has risen, commuting to the suburbs has taken a much greater share of take-home pay, says Ed McMahon, the Urban Land Institute's senior resident fellow on sustainable development — 25% of a household's income in an auto-dependent suburb, compared with 19% for the average in-city family.
"In some cases, they are spending close to 30%" if they have a spouse and teenage kids driving on their tab, he says. By contrast, he says, average Europeans spend 9% on transportation because of their access to rail and subways.
Building to suit no one
You can blame developers and lenders for getting us into this sprawling mess, says Christopher B. Leinberger, director of the Graduate Real Estate Development Program at the University of Michigan and a visiting fellow at the Brookings Institution.
For decades, most builders focused on the fringes, he says, where land is cheaper, zoning is easier and lenders were more willing to finance projects. Yet, for much of the past decade, surveys have found that this is not what a growing number of Americans want.
Almost 60% of 12,360 Americans surveyed in 2005 said they want to live in walkable communities, close to transportation and a town center with services, shops, churches and other amenities, according to last spring's Journal of the American Planning Association, which echoed similar findings by the National Association of Realtors in 2004.
Yet according to a recent study by the Environmental Protection Agency, redevelopment of our nation's urban main streets has lagged new suburban construction in all regions except one: New York.
The large majority of new construction — from Florida to Ohio to California — is in undeveloped areas, lacking a true town center or walkable core. That's forced residents to rely on strip malls and big-box centers such as Wal-Mart as central gathering places, something that most surveyed said they would prefer not to do.
The senior sell-off
This lack of convenient amenities and the related driving burden could be the undoing of the suburbs in coming years. Nelson predicts baby boomers will start selling off their McMansions in the suburbs at a rate of 5% a year, or 20 million to 30 million homes between 2010 and 2030.
On our blog, Listed: Buyers today: 'This house is too big'
"They are going to figure out that they don't want to maintain a large home on a larger lot in the suburbs," Nelson says. "They will move into smaller homes … or attached homes or condos or town homes to simplify their lives" and be close to medical services and transportation.
This reverse migration is what Phoenix broker Greg Swann was betting on when he moved his real-estate firm, Bloodhound Realty, to a neighborhood closer to Phoenix. Although the whole Phoenix market is suffering due to a housing glut, he expects demand to pick up first in those communities closer in. "We anticipate that this is where people will downsize to," he says, as well as the active senior communities in the surrounding areas.
Many communities farther outside of Phoenix — which has had the biggest drop in values in the entire U.S. — won't fare as well, Swann says. Areas such as Buckeye, Maricopa and Queen Creek, located an hour or more away from the city's core, are now littered with empty houses and weed-filled front yards, says Phoenix agent Francy Thompson, of Thompson Realty, as people have moved out or walked out on homes that have lost half or more of their value. "The outskirts really got hit hard and fast," Thompson says.
Indeed, says McMahon, "The collapse in housing prices has been most acute on the far edges on major metropolitan areas around the country.
The suburban survivors
Of course it's easy to overgeneralize, especially when you're talking about real estate. Many suburban areas are still flourishing. And in some parts of Atlanta, people continue to drive farther and farther out from the city to get lower taxes, more home for the money, better schools and lower crime, says Maura Reising, an agent with Keller Williams Realty Atlanta Partners in Coweta County, south of Atlanta.
These factors will continue be compelling, especially to the parents of school-age children — about one-third of the housing market — a point that planners concede.
"When looking at schools, it's hard to justify a lot of inner-city neighborhoods," Leinberger says.
But, with a greater percentage of the population now without young children, either because of age, circumstance or choice, there will be more incentive for people to move back to inner cities and the less far-flung suburbs.
The suburbs that stand the best chances of survival, however, are those with the most amenities and Main Street charm, planners and agents agree. Real-estate agent Reising points to the success of outlying communities such as Newnan — 30 miles from Atlanta — with its walkable shopping areas that serve as a weekend gathering place for residents. "People will drive more for a better quality of life," she says.
This same kind of success can be found in suburbs such as Miami's Kendall neighborhood; Silver Spring, Md.; the Old Town section of Pasadena, Calif.; and Arlington, Va., which have thrived due to their walkable gathering places and/or access to rail transportation.
The suburbs' great hope?
The next development frontier, planners say, should be the empty big-box centers, parking lots and strip malls in the nation's suburbs.
Turning these areas into mixed-use modern Main Streets, with multilevel shops, services and condos or apartments, could rescue some of these far-flung neighborhoods from extinction, McMahon and Leinberger say.
"People who lived in mixed-use walkable communities drove almost 30% less," McMahon says, because they didn't have to drive from place to place on the weekends. “Eighty percent of the trips in a car are not home to work," he says.
Better access to transportation, bike lanes, wider sidewalks or even short-range buses or trolleys to cruise local shopping areas would all help attract more residents in the years to come, experts say.
It won't be easy converting the suburban landscape, planners say, for several reasons:
Changing city zoning and parking regulations is more time-consuming and complex than building on raw land.Banks are still nervous about funding many redevelopment projects.Federal transportation funds have focused mostly on building rural roads.Suburban municipalities are still giving builders lucrative incentives to build on their land.But, ultimately, experts say, retooling these areas will be necessary to attract residents of any income level.
"A lot of this stuff will never be worth what the mortgage is (now) worth," Leinberger says.
Attracting the lower-income residents to fill these houses and keep the suburbs afloat also will take bringing more transportation there, Nelson says. And the number of people willing to move out there will greatly influence the quality of life in the city.
"The suburbs are going to be in really difficult times," Nelson says. "Yet it is the suburbs that hold the key to reshaping our urban living."
Are you moving to the next slum?
If you're moving into a new area, you want to make sure its value is poised to increase rather than wane. Ask yourself these questions to get a sense of whether things are moving in the right direction:
What's happening with the crime rate in the area? Compare the data in monthly police reports with stats from two or three years ago. Have there been double-digit percentage increases in property and violent crime? You can also view crime data at Sperling's Best Places.
Is the number of people living below the poverty line growing? How quickly are the ranks of the uninsured growing? You can find these statistics from U.S. Census data. (One caveat: These numbers aren't more recent than 2007, so you may want to supplement with questions to local social-services organizations.)
Are rents dropping dramatically? If there are a lot of empty houses being put up for rent, it means there's a lot less incentive for people to buy there.
How does the neighborhood look and feel at night? Take a drive around the area to see if it feels safe and quiet, or if it feels like a battle zone.
What kind of amenities and access are in place for residents? Suburbs with access to rail transportation, those that are relatively close to the city and neighborhoods with walkable cores tend to be more desirable (and therefore retain their value better). If the local McDonald's is one of the few gathering places, you know you've got a problem. You can look up walkability scores for more than 2,500 neighborhoods at
How are the schools? Do the schools there have good student test scores? Is there a good deal of parent involvement and investment by the community? Try using GreatSchools to drill down on this data.
"As the price of gasoline has risen, commuting to the suburbs has taken a much greater share of take-home pay - 25% of a household's income in an auto-dependent suburb, compared with 19% for the average in-city family.
In some cases, they are spending close to 30% if they have a spouse and teenage kids driving on their tab. By contrast, average Europeans spend 9% on transportation because of their access to rail and subways."
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