Changing buyer preferences and shifting economic factors could render millions of homes “unsellable” in the next decade if a University of Arizona professor is right about the upcoming decade. According to Arthur Nelson, a professor of architecture, planning, and landscape architecture, the homes that Baby Boomers and members of Gen X have found appealing will be very unattractive to the next two generations of buyers: Millennials and Gen Z.
“They don’t want the large home on the large lot in the distance suburbs,” Nelson explained. “They are looking for something closer in, a little higher density, but not high rise.” Nelson believes Millennials and “Zoomers” will likely want townhouses and smaller homes in walkable communities where they can bicycle or walk to their destinations. He believes this will be the case even in light of the COVID-19 pandemic, which many analysts say has created an important shift in mindset for homebuyers and could send city-dwelling households scrambling to the suburbs and other rural areas. “I would say [COVID-19 will] have no effect at all because it has been too short…. This is going to be a short-term situation…human beings are social creatures.”
Nelson allowed, “Not all [buyers will want small homes in walkable communities], but we’re talking at least half…whereas the Baby Boomers, when they were raising their own children, couldn’t care less about walkable communities.” Nelson believes the mismatch between what properties go to market over the next decade and what buyers want will create a fire-sale situation that will lead to sales in some cases but overwhelm larger, concentrated markets.
“In most metropolitan areas in this country, the supply of potential Baby Boomer sellers will vastly exceed the supply of people wanting to buy those homes because of the lack of growth,” he said.
Is there a solution for this pending short sale? Nelson thinks the answer could be turning today’s large, residential properties into group rental homes or creating federal programs to buy the properties and “raze the homes, tear them down, and reassemble land into larger, open-space areas”. He said there is precedence for this type of program and believes it could be accomplished through FEMA or the USDA.
“We should not wait to foreclose abandoned homes after markets have collapsed,” he emphasized in his paper. “In the end, we cannot let policy inertia short-change millions of America’s seniors.”
Do you think Nelson’s predictions are accurate?
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