Market trends

In the March 2013 issue we reviewed Arthur C. Nelson’s book, Reshaping Metropolitan America, and some of his numbers are further analyzed in an article in the current issue of Better! Cities & Towns. One of Nelson’s main findings is that a demographic wave of Millennials, who are delaying having children and strongly prefer urban places, combined with the downsizing Baby Boomers, will transform the character of the housing market in the next two decades. There will still be plenty of households with children in America — Nelson forecasts more than 38 million in 2030. But these households will make up a very small share of the nation’s growth — and therefore a small share of the growth in the housing market. The majority of the growth will be single-person households (see table above). “The bottom line is that a new reality has emerged: The future of American planning and public policy will be geared to meeting the needs of households without children, with half the new market being single-person households,” Nelson says. “Yet, our planning, zoning, and development codes remain rooted in reality that no longer exists — that of mass family and child-oriented markets.”

According to the book Reshaping Metropolitan America, about half of all nonresidential structures in the US will be “ripe for redevelopment” in 2030. Many of these are commercial strip retail buildings with large parking lots or dated office buildings on suburban sites, according to an article in the current issue of Better! Cities & Towns. The annual report Emerging Trends in Real Estate notes that many suburban retail and office properties across the US are languishing in value and may not be worth refurbishing. All in all, 50 billion square feet of commercial space in the US will need redeveloping by 2030, says Reshaping Metropolitan America author Arthur C. Nelson. One of the challenges to redeveloping such sites, however, is that they are often located on commercial strip corridors that are not appealing for mixed-use development. That challenge could be addressed by “complete streets” projects on major thoroughfares that need to be rebuilt anyway, setting the stage for redevelopment.

Transit-served neighborhoods are rising in value -- sometimes skyrocketing —- when they have good urbanism and are perceived as safe, according to an article in the April-May issue of Better! Cities & Towns. But many are losing value and depopulating — even in neighborhoods with well-connected streets that would be highly walkable given more and better destinations. A study by the American Public Transit Association and the National Association of Realtors showed that more than 60 percent of Chicago's 388 "transit sheds" underperformed the region as a whole, for example. The Minneapolis-St. Paul, Phoenix, Boston, and San Francisco regions were also studied. Languishing transit-served neighborhoods could be made more appealing through placemaking, street trees, and more destinations —- like grocery stores. If Arthur C. Nelson is right in his 2013 book Reshaping Metropolitan America, then transit sheds, particularly those in the central city and inner-ring suburbs, should gain value through 2030. That means that the transit sheds that lost value from 2006-2011 — and where real estate is a bargain today — could be investment opportunities in the years to come.

Downtown Wichita has had $372 million in development in since 2010, with another $112 million underway or about to break ground in 2013, according to a report in the current issue of Better! Cities & Towns. Population of the 800-acre downtown is expected to more than double by the middle of this decade. Wichita, not a “creative class” mecca, is seeing many of the same trends that downtowns are experiencing nationally with a rise in demand and revitalization. Prior to the recent activity, Wichita’s downtown had “epicenters of vitality, but they weren’t connected,” says Jeff Fluhr, president of the Wichita Downtown Development Corporation. The city, under mayor Carl Brewer, hired Goody Clancy to create a downtown plan and brought in market experts to get a precise picture of the development potential. Key investments made in connection with the plan were streetscape improvements, conversion of one way streets to two way, planting of street trees, traffic signalization, and a parking garage, Fluhr says.

The American real estate landscape is changing dramatically. Multifamily rental buildings will be in demand in walkable communities, and the suburbs will become more diverse.

In the March 2013 issue we reviewed Arthur C. Nelson’s book, Reshaping Metropolitan America, but some of the numbers in the book are worth further consideration and analysis.

Master plan gives the city clear vision; Helps spur redevelopment at a torrid pace.