Tag Archives: single-family homes

The possibility that downsizing housing may now cost more

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Moving to smaller housing units may not be cheaper at this point in time:

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The average 30-year fixed-rate mortgage has soared to 7.49 percent, according to latest data from lender Freddie Mac, while many homeowners are locked into much cheaper 2 or 3 percent deals on their current homes. 

Meanwhile the number of smaller houses for sale has diminished in recent years, according to listing website Realtor.com – pushing up the price of the limited inventory on the market.

The number of properties for sale that measure 750 to 1,750 square feet – the size range people who are downsizing tend to purchase – has dropped by more than 50 percent since 2016, according to Realtor.com…

Hannah Jones, Senior Economic Research Analyst at Realtor.com, said: ‘Home prices for smaller homes fell 0.4 percent year-over-year in September, but remained more than 50 percent higher than pre-pandemic.

On one hand, this is about a particular moment where demand is high for small houses, few are available, and selling and buying means acquiring a higher interest rate.

But, there are also larger forces at work contributing to this moment. The United States has the largest houses in the world. This contributes to the lack of smaller homes for sale; fewer small units have been constructed in recent decades. There are also a lot of older Americans who have larger homes and may not want to keep them as they age. Are there enough units to accommodate their changing housing needs and/or enough buyers who want the homes they previously owned?

In many ways, the housing stock in the United States does not change quickly. Builders, developers, municipalities, buyers, and others interested actors need time to assess conditions and change course. Coordinated planning across different interested actors could help as housing conditions and needs change in the coming years.

My interpretation of what Americans mean when they say “renting is throwing away money”

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I recently read through some social media discussion of this particular phrase: “renting is throwing away money.” As someone who studies suburbs and housing, what do people mean in the United States with this phrase? Here are a few dimensions of this and some historical and social context:

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  1. In more recent decades, Americans have shifted to viewing homeownership more as a vehicle for investment and making money. Houses are not just places to live; people expect them to appreciate in value and provide profits over the years. (And in some places, homes have quintupled in value over several decades.) Renters do not get to share in this built equity while the landlord could cash out both in monthly payments and a sale down the road. If homeownership is primarily about buying a property to see it appreciate, then renters are missing out on this opportunity.
  2. However, homeownership in the United States is not just about making money. Homeownership signals something involving status, social class, and a commitment to a community. Homeowners have made it. Their ability to purchase a home is a signal of their industriousness and commitment to a community. They may raise a family there. Yes, they can sell the home down the road but they have bought into a particular place and put their money into a particular community. This is less about a personal return on investment and more of a marker of the homeowner and their ties to their neighbors and neighborhood.
  3. In contrast, renters are often treated differently than homeowners. They can be viewed as more transient and less interested in building up the local community. They may be assumed to be lower-income or less desirable residents for the community. Rentable units are a threat to community and single-family home property owners. (I have found this particularly true in wealthier suburban settings where opposition to apartments is often framed in terms of who might live there. More expensive apartments do not attract the same opposition even if residents still might be opposed to density, the height of the building, traffic, etc.)

Summing up: in an era with a hyperfocus on investment, homeownership can be viewed as a better long-term return on investment than renting. Additionally, Americans often view homeownership as more virtuous and more desirable for community life than renting. Put these together and there are long-standing concerns regarding renting and apartments.

From the first post-WWII house constructed in Naperville (by Harold Moser) to today

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Can one property help highlight the changes in Naperville, Illinois in the last century? I ran into this news item first published May 30, 1946 in The Naperville Sun:

The Moser Fuel and Supply company has just completed the first new house to be built in Naperville since the outbreak of the war in 1941. This “No. 1” house, as it is referred to by Moser employees, is at 417 S. Sleight St., and is a little dream in brick veneer with chocolate-color mortar. Ten other Moser houses are going up around No. 1, eight of which are in the 400 block of south Sleight Street and two on South Wright Street.

According to multiple real estate websites, the current house on the property was constructed in 2004 and is worth over $1 million. Here is a June 2019 Google Street View image of the block, including the newer home on the property:

Several patterns worth noting:

-Naperville was a different place after World War Two: much smaller in population, lots of farms and agriculture around.

-Harold Moser and his firm ended up building thousands of units in Naperville. Moser Highlands, one of his first subdivisions, is just south of this location. He and his wife are honored in a statue along the Naperville Riverwalk:

-There are lots of teardown homes in Naperville, particularly near the downtown. As Naperville expanded in population and its status grew, some of the older suburban homes built decades earlier gave way to larger structures. I studied patterns in some of these new homes in a 2021 article.

In other words, this was not just one home constructed by a resident who owned a local business; it was part of larger changes to come in a suburb that became large and wealthy.

Rents up in the suburbs

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Recent data suggests rents are up significantly in the suburbs and often faster than rents in cities:

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Rents in suburbs climbed 26% through this past July since March 2020, 8 percentage points higher than the gain in urban cores, according to a report from rentals website Apartment List. Suburban-rent growth was greater than its urban counterpart in 28 of the 33 metro areas studied, the company said…

The widest rent gap was in Portland, Ore., which lost nearly 3% of its population between 2020 and 2022. Rents in Portland’s suburbs are up 23% since 2020, compared with about 2% in the center city.

Moves to the suburbs have continued despite a historically difficult for-sale housing market. The number of existing-home sales in July shrunk to its lowest level for that month since 2010, and prospective buyers continue to struggle with 7% mortgage interest rates and sale prices that remain near records.

Rents for single-family homes, meanwhile, continue to grow in most parts of the country. House rents in the Chicago, Boston and Orlando, Fla., metro areas each rose more than 5% in June compared with a year earlier, according to data firm CoreLogic. Green Street, a real-estate research firm, predicts single-family-home rental landlords will post the highest returns of all real-estate owners this year.

Though apartment asking rents are declining slightly in 2023, on average that drop has been felt less in suburbs, Apartment List said. Rents in suburban towns around Charlotte, N.C., and St. Louis, for example, are still growing, while in adjacent urban cores, growth in rents now runs negative, when measured annually.

Traditionally, the suburbs are places with single-family homes. Renters can be viewed with suspicion.

Yet, social and economic conditions have pushed toward more rental units. There are fewer starter homes. Some people want flexibility rather than locking into higher interest rates and economic uncertainty. Single-family homes can be rented out and are not just occupied by homeowners. Denser suburban downtowns and population nodes can include more rental units.

Whether this persists long-term will be interesting to see. Will people shift from renting to owning when conditions are more favorable? Are more suburban communities open to rental units rather than focusing development efforts on single-family homes?

Housing market slows, first-time buyers hit hard, higher priced homes not down as much

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Headline: “June home sales drop to the slowest pace in 14 years as short supply chokes the market.” But, not everyone in the housing market is having the same experience:

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First-time buyers are struggling the most. Their share of June sales fell to 26%, down from 30% in June 2022. That is the lowest share since the Realtors began tracking this metric.

The higher end of the market, however, appears to be recovering. While sales were down across all price points, they were down least at the higher end. That was not the case last year, when higher-priced home sales were dropping off sharply.

The bifurcated housing market continues. At the cheaper end, the bar for entering keeps rising. With prices up, mortgage rates up, and supply down, it is harder to purchase a first home. At the more expensive end, those with means continue to be able to buy and sell.

This is not new. The starter home is hard to find in the 2020s for multiple reasons. If people cannot buy a home early on, this limits opportunities down the road. If you are already in a more expensive home, you have more options.

Whether the differences between these two ends of the housing market is addressed in ways that help long-term remains to be seen.

Barbie’s Dreamhouse and the dream of homeownership

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Barbie has a big house, reinforcing ideals in the United States about homeownership:

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From the beginning, much of Barbie’s existence — her unrealistic physical proportions, the lack of racially diverse dolls, the toy’s reinforcing of gender roles — has been debated in jest and in seriousness. But her home, which has not been as publicly parsed or praised like the doll, has been a mirror for the various social, political and economic changes the rest of the country was experiencing. It has followed housing patterns and trends, from chic, compact urban living to suburban sprawl to pure excess. At times, it has been out of step, ignoring the country’s ills (Barbie’s never been broke; she has never lost her house to foreclosure)…

Financial institutions frequently turned down mortgage applications for women without male co-signers when Mattel debuted the Dreamhouse in 1962, three years after Barbie shook up the toy world, arriving in a one-piece bathing suit and kitten heels…

Society has held up “this promise of homeownership as part and parcel of the American dream,” for centuries, said Ms. Castro. More than 60 years of Barbie’s Dreamhouses have further instilled that in us from a young age.

To own a home at all, especially one with a three-story slide, can feel unattainable for most. From July 2021 to June 2022, home buyers were richer, whiter and older than they had been in decades. The share that were first-time homeowners was the lowest its been since at least 1981. And, the median home price exceeded $400,000 for the first time.

It’s called a Dreamhouse for a reason. We can all dream, can’t we?

Is the Barbie Dreamhouse simply a plot to teach children that they should aspire for a large home with all the latest furnishings and in a bright style?

The American Dream of homeownership is persistent and takes many forms. It includes statements by presidents. It includes decades of policies. It is reinforced in television shows and on television networks. It then would not be a surprise that children’s toys would reflect a similar theme.

How many toys do this? How often does “playing house” explicitly or implicitly support homeownership? Even if children cannot voice what they are doing, living in a society that pushes the American Dream of a suburban single-family home is bound to be picked up early in life.

All of this thinking of the Dreamhouse reminds of Lynn Spigel’s 2001 book Welcome to the Dreamhouse: Popular Media and Postwar Suburbs. I recommend it.

New York Times finds more suburbanites complaining about pickleball noise

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Pickleball produces noise and some suburbanites across the country are not happy about it:

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Sports can produce all kinds of unpleasant noises: referees’ whistles, rancorous boos, vuvuzelas. But the most grating and disruptive sound in the entire athletic ecosystem right now may be the staccato pop-pop-pop emanating from America’s rapidly multiplying pickleball courts.

The sound has brought on a nationwide scourge of frayed nerves and unneighborly clashes — and those, in turn, have elicited petitions and calls to the police and last-ditch lawsuits aimed at the local parks, private clubs and homeowners associations that rushed to open courts during the sport’s recent boom.

The hubbub has given new meaning to the phrase racket sport, testing the sanity of anyone within earshot of a game.

People from a number of communities are interviewed about the noise. The suburbs figure prominently in this list of the communities cited:

-Arlington, VA: suburb of Washington, D.C.

-Wellesley, MA: suburb of Boston

-York, ME: suburb of Portland

-Scottsdale, AZ: suburb of Phoenix

-Longboat Key, FL: suburb of Sarasota

-West Linn, OR: suburb of Portland

-Falmouth, MA: in the Barnstable Town MSA

Is this a primarily suburban problem? It may not be exclusive to suburbs – see this earlier post about noise complaints in Chicago – but pickleball is growing in popularity among suburbanites and suburbs have a lot of single-family homes whose owners do not appreciate noises or other threats to their private lives.

Will this continue to be a suburb-by-suburb problem, is there a solution that can be effective across suburbs, and/or will this problem spread to kinds of American communities?

What it might mean to have a house sticker on the back window of my car

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Stickers on the back windows of cars can signal all sorts of things. The number of family members. A favorite vacation spot. A beloved car brand or sports team.

What would a house sticker in the back window mean?

I recently saw a SUV with a two-story house sticker. The sticker looks similar to a drawing a child might make of a house. The picture below has such an image; this sticker had much cleaner lines but had a similar shape.

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Here are some options for what the driver of the vehicle might want others to know:

  1. They own a home. Americans value home ownership.
  2. They value home. Like others might include stickers of family members and pets, this house signals the importance of home and what happens there.
  3. They work in real estate or a related industry. However, wouldn’t they want to put their name or company to make this clear?
  4. Someone in their household or a friend drew this picture and they made a sticker out of it. It is easy to order stickers online.

Put together a home and an SUV (with a sticker of a home) and you have the American Dream?

Potentially different logics for land: from a church that “nourished thousands” to million dollar homes

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Reflecting on the tearing down of a Catholic church in Chicago, one long-time parishioner describes what will replace the structure:

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It’s a “good’ neighborhood now. And the land that Transfiguration once occupied will be turned into about a dozen single-family homes, where, in an area that was zoned for and still is largely home to two- and three-flats, the starting price of a new house is $1.35 million. Talk to me about the zoning on that one.

This week is the one I dreaded: the physical building, Transfiguration of Our Lord, is being torn down. I held out hope that the building that had welcomed and taken care of so many would be preserved. At the very least, I hoped that the land that nourished thousands of families would house a few more of them in the middle of a nationwide affordable housing crisis. But why build homes for two or three families when you can get rich selling a house to just one?

So the fences have gone up, and the building is coming down.

Processing the closing of a long-time religious congregation can be difficult.

But, there is also a suggestion above that these are two very different uses of land. According to this member, the church nourished families and the community. The church welcomed immigrants. Its school educated kids. The church was a gathering place. Churches in the United States do not pay property taxes, but they can provide services for the neighborhood.

In contrast, the buildings that will replace the church will be expensive single-family homes. These will provide private space for households within a desirable neighborhood. There is money to be made in the developing and selling of the buildings.

This could lead to a question: is land better used for organizations that serve the community or for single-family homes? If people care more about money, creating more real estate is the answer. If people want to emphasize community, there might be room for religious congregations and other neighborhood organizations, but they may need to sustain themselves. Americans value single-family homes and like making money. When congregations close, it is a relatively easy step in many communities to redevelop this land or reuse the buildings in ways that generate money and revenue.

Responding to the affordability of suburbs outside America’s most expensive cities

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A recent analysis looked at how affordable suburban residences were compared to prices in the most expensive cities in the U.S.:

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Buying a house in the suburbs isn’t just a little easier on the wallet for city dwellers. In some parts of the country, bedroom communities offer an entirely different real estate market. Over 600 of the 777 suburbs within 30 miles of the country’s 20 most expensive cities are more affordable in terms of price per square foot — up to 65% cheaper in some places.

The East Coast offers the most suburban alternatives to main cities: 95 of the top 100 suburbs with the biggest price differences are near New York, Washington D.C., Boston, and Miami…

These are the top 10 cities with the most relatively affordable suburbs for home buyers, ranked by the percentage of suburbs with a lower cost per square foot compared to the main city.

  1. Salt Lake City, Utah (100%)
  2. New York, New York (98%)
  3. Washington, D.C. (97%)
  4. Boston, Massachusetts (93%)
  5. Honolulu, Hawaii (90%)
  6. Austin, Texas (89%)
  7. Seattle, Washington (83%)
  8. Boise, Idaho (80%)
  9. Denver, Colorado (80%)
  10. Riverside, California (79%)

A few thoughts in response:

  1. Do people always seek out the cheapest housing and move to the suburbs? Some will move to the suburbs because of lower price points. Others might stay in the city or go to the suburbs for other reasons.
  2. Is 30 miles out from an expensive city a large enough radius? It might be for some of these cities and not for others. Additionally, many commutes are suburb to suburb to being 40 miles out and commuting to a suburb 25 miles from the city is a different comparison than city versus suburban settings.
  3. One reason the expensive cities are so pricey is that they are desirable. If more people move to a region, does this then decrease the affordability of suburbs as well?
  4. Is it safe to assume then that there are metro areas where city and suburb prices do not have much difference?