Friday, January 13, 2012

Outer suburban areas are losing their appeal

Back in 2005, at the height of the real estate boom, buyers were swarming to buy new McMansions almost 50 miles from the core of Philadelphia.

The real question was, why wouldn't they? They were getting more house for the money, everything was brand new, and they could escape city life. But is that really why the demand was there? No, it wasn't. It was because home prices were appreciating at an astonishing rate, getting competitive financing was about as easy as tying your shoes, and bigger just seemed better. All of these factors created an inflated demand for new construction housing never seen before in American history. As we can all see today, it was unsustainable.

The funny thing is that even though this happened only 7 years ago, it seems to be the complete opposite of how buyers think today. Today, buyers will sacrifice a home's size for close proximity to public transportation, they are buying fixer-uppers to add sweat equity to their bottom line, and they are doing everything they can to live within their means. There was a great story written in the New York Times titled "The Death of the Fringe Suburb." It's a very well written article and it really captures why things are the way they currently are.

Please also give Inga Saffron's latest Changing Skyline article a read. It focuses more on the Philadelphia area and how its demographics are changing.

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