It is becoming clear that young people and retirees favor a compact urban lifestyle to the sprawl of suburbia, as the cultural value of owning a large home and multiple cars erodes in our resource-strapped contemporary world.
On October 20, 2011 at Ithaca’s Downtown Housing Forum, the Danter Company, a real estate research firm, presented findings on a study of the downtown housing market commissioned by the Downtown Ithaca Alliance. Their findings support a wider recent trend in American housing demand: the younger generations are abandoning the “American Dream” of owning a large-lot, single-family home, in favor of apartments and an urbanized, more connected lifestyle. This shift, which bodes well for sustainability, must be understood and internalized by urban planners, architects, urban designers, and developers.
Danter focused primarily on rental apartments, for which there is massive demand due largely to the presence of Cornell University and Ithaca College. There is less than 1% vacancy in Ithaca – comparable to New York City – which makes Ithaca’s housing market appear strong (up to 8% vacancy is a good market) but inflates monthly prices for renters. The median rent for a two-bedroom apartment is about $1,000, the highest of any comparably-sized student population area in the country.
Nonetheless, young people want to live close to their friends, school or work, and urban amenities. The study predicts that Ithaca’s market could accommodate 1,000 new rental units in the next five years. Danter asserts the decline in home values created by the recent housing crash is not likely to recover, making apartment rental even more appealing. In most American markets today, there are 1.8 home buyers for every seller, compared to four home buyers per seller in 2000. In 2020, there will be less than 1 buyer per seller.
An often-overlooked segment of the market are seniors. Baby boomers are reaching retirement age, and over the past decade there’s been a 10-15% national increase in senior apartment occupancy as retirees seek to downsize and participate in an engaging urban lifestyle.
Is there evidence of increasing urbanization in your community?
Credits: Images linked to source. Facts linked to source or provided by Ken Danter, principal of the Danter Company and real estate expert, at Ithaca’s Downtown Housing Forum.