The housing aspirations and expectations of our nation’s buyers are moving in different directions as our needs and desires are gradually being re-evaluated.
The key has always been location (and remains) however over the past decade or so, it increasingly became more about larger homes, larger yards, larger room size, and big volume entryways. In general, “bigger is better” became the motto for individuals with good discretionary income.
There seems to be a growing mindset that privilege demands a larger social responsibility, coupled with a focus on lifestyle interests. Already in NYC and LA, high-end homes, especially those with dated architecture and floor plans, are seeing buyer hesitations, as political, economic, and cultural issues develop. Bigger, flashier homes are taking longer to sell, and sell at prices that allow buyers to afford to redesign the space for the 21st century. Today’s consumer wants to see more open, energy-efficient windows, exercise spaces, home office space for one to two people, spaces for big screen TVs, and inviting outdoor patios, just to mention a few. Because location is always paramount, we have all seen people spend hundreds of thousands (even millions) of dollars just to tear the home down and build something more appealing.
Many of the successful millennials have not gravitated toward the “bigger is better” concept. And many financially comfortable Baby Boomers are downsizing and embracing a more “humbled” wealth posture. Essentially, lifestyle desires are evolving to a point where, “what people do with their money is more important than what they own.”
There still remains a solid pool of buyers for large homes in good neighborhoods. The caveat is that many of today’s buyers may not have the desire, time, patience, experience, confidence or money to accomplish a major remodel.
If a house hasn’t been updated in 15 to 20 years and the floor plan does not accommodate today’s lifestyle, the buyers hire an architect and contractor to help them
attain what they would like. Although sellers may find it necessary to price these houses accordingly, the good news is that Denver has been a strong real estate market for decades. Meaning, if someone has owned a house for 10, 20, or 30 years, they are making a very nice profit, allowing them to sell and move on with lifestyle plans.
While some baby boomers and seniors are happy “aging in place”, most look to change their lifestyle by:
– Downsizing to a smaller home or condo.
– Downsizing and purchasing a home or condo in a resort area.
– Selling the house and moving closer to children and grandkids.
– Choosing to locate to a 55 year+ active, living community.
Meanwhile millennials (now parents) prefer the stability and affordability of the suburbs, yet still want some of the urban amenities. So, the term “hipsturbia” (not my creation) was born. It basically means “cool” suburban communities that are more walkable and accessible to stores, parks, movies and community transit. You are now seeing “town centers” being developed outside almost every metropolitan city (i.e.Arvada, Southglenn)
The second-home market is flourishing and has been gaining strength for several years. These popular markets have been doing well, not only in coastal towns, and are in demand throughout many inland states such as Arizona, New Mexico, and the many year-round Colorado resort communities. Desire to purchase has been steadily rising with younger buyers (and many baby boomers). The inspiration to own a second home is being influenced by the desire to experience a “life well lived”.
With an election year on the horizon, there may be concern about what kind of influence it might have on real estate. There is chatter but it does little to change the current path of the real estate market. In fact, the fourth quarter of 2016 was one of the strongest year-ends in Denver history. Psychologically there has been a slight easing of higher-end markets in which larger net-worth individuals have more focus on the stock market closer to the election.
At day’s end, any election has only had minimal temporary, impact. If you are concerned, I would suggest putting your house on the market in the first few months of the year and not waiting until late spring or summer. It could be a blessing in disguise since the buyers are out, but there is less competition in the market.