Writing about a paper published by the Federal Reserve Bank of Kansas City,
WSJ blogger Ben Leubsdorf writes, "The single-family home isn’t obsolete, yet. But the aging of the baby
boomers could reshape the U.S. housing market and economy in the coming
years."
Here is a brief passage from the article:
Based on demographic trends, the country should see a stronger
rebound in multifamily construction than in single-family construction,
Kansas City Fed senior economist Jordan Rappaport wrote in the most recent issue of the bank’s Economic Review.
(Though he also notes slowing U.S. population growth “will put
significant downward pressure on both single-family and multifamily
construction.”)
Construction of multifamily buildings is expected to pick up strongly
by early 2014, and single-family-home construction should regain
strength by early 2015. “The longer term outlook is especially positive
for multifamily construction, reflecting the aging of the baby boomers
and an associated shift in demand from single-family to multifamily
housing. By the end of the decade, multifamily construction is likely to
peak at a level nearly two-thirds higher than its highest annual level
during the 1990s and 2000s,” Mr. Rappaport wrote. . .
“More generally,” Mr. Rappaport wrote, “the projected shift from
single-family to multifamily living will likely have many large,
long-lasting effects on the U.S. economy. It will put downward pressure
on single-family relative to multifamily house prices. It will shift
consumer demand away from goods and services that complement large
indoor space and a backyard toward goods and services more oriented
toward living in an apartment. Similarly, the possible shift toward city
living may dampen demand for automobiles, highways, and gasoline but
increase demand for restaurants, city parks, and high-quality public
transit. Households, firms, and governments that correctly anticipate
these changes are likely to especially benefit.”
Consistent with the Reston theme, "
Reston for a Lifetime," the thrust
of this article highlights the relative future strength of the
multi-family home market, especially in urban areas. The issue nationally and here in
Reston, however, is and will be: Will senior Restonians be able to
afford housing in Reston's prospective urban high-rise residences near
the coming Silver Line? With existing Town Center condo listing prices
averaging near $600,000 and rents running from $1,600-$5,000 per month,
the opportunities for baby boomers or other seniors to retire in
Reston's urban core are extremely limited.
