The re-emerging housing market is as much shaped by the scars left by the market’s collapse as it is by a generational shift as the economy recovers, a recent study shows.
Both the baby boomers and Generation Y are going through life changes typically associated with changing their housing situations — the former facing retirement and latter the start of their professional careers.
Data presented by the Sonoran Institute, an Arizona-based nonprofit focused on conservation and managing growth, show that people are beginning to eschew suburbia for more community-based neighborhoods, ones with shops, schools and culture within walking distance. It’s the sort of urban in-fill and redevelopment dubbed “smart growth.”
“Our communities are changing and what people want out of life is changing,” said Randy Carpenter, the institute’s Northern Rockies program director.
The market reflects that, Carpenter said. “The housing market isn’t driving how we’re changing. How we’re changing is driving the housing market,” he said.
The data were compiled for the institute in a soon-to-be-released report, “Reset: Assessing Future Housing Markets in the Rocky Mountains.”
The report look at development across six communities in Colorado, Idaho and Montana, including Bozeman. Information was collected from housing starts, multiple listing services and surveys.
“In all of these markets, there is at least some degree of consumer preference for this ‘smart growth’-type product, which previously we hadn’t seen as much traction for,” said John Lavey, land use planner with the Sonoran Institute.
It isn’t a significant portion of the housing market, but that it’s there and appears to be growing, Lavey said.
A Chronicle analysis of data from Bozeman’s city building department shows that investment over the past 11 months in real estate around Bozeman’s urban core accounted for less than 5 percent of all the money invested in residential construction within city limits.
Residential remodels around the southeast part of town — near the Emerson Cultural Center, the Galligator and Sourdough trail systems — represent the bulk of that $2 million of spending.
Over that time period, the most money — more than $61 million - went into new single-family homes built around the western edges of town and in Bridger Canyon. The data show roughly $23 million went into communal living spaces, such as townhouses and duplexes, concentrated on the northwest side of the city.
Underpinning that trend, Carpenter said, is what demographers call the “Great Convergence,” a period when the two largest generational groups are making big changes in the type of households they’re a part of.
Retiring baby boomers prefer to be closer to healthcare, shopping and other conveniences, he said. Members of Gen Y are entering the housing market as they move out of their parents’ homes or apartments shared with friends during college.
Their housing choices are guided less by their parents’ ideals of a big home on a big lot with a long commute and more by what they saw during the Great Recession, which was that real estate is not the can’t-miss investment it once was, Carpenter said.
“The Y generation does want more urban. (They are) less interested in possessions and big houses than they are in experience,” Carpenter said. “They want the time and convenience.”
He and Lavey note that “smart growth” neighborhoods aren’t overwhelmingly in demand, but it appears to be a trend that’s gaining steam.
“To me, that’s one of the biggest takeaways. Not that this is a prescription that people need, but that there is a market for it. And if you tap it then you stand to make money,” Lavey said.
Jason Bacaj may be reached at email@example.com or 582-2635.