With an eye to the future, should we really be buying in remote suburbs, or is that like investing in VHS rental shop in a digital age? I’m seeing what looks like a massive urbanization trend. I am a buy and holder. Other people put their end of year profits and personal savings into 401k plans. My wife and I buy properties for the future. Putting aside the (highly important) factor of micro-environments for the purpose of this thread, we have been talking a lot about trends. Julie & I learned in 2008 the impact of macro trends. Before that we only thought locally, but seeing the how monetary policy shaped real estate and affected our personal bottom line the way it did, I'm raising my vision to keep an eye on larger forces. If and when the interest rates finally rise and inflation hits to correct market tampering, we'll find ourselves in a very different economic and real estate environment. I’m locking in as many long term low interest loans as I can. In the same way that I see a tidal wave of inflation, Julie and I have been watching a steady flow of wealthy people migrating to city cores. In the past 50+ years our poor lived in inner city ghettos and the wealthy escaped to their suburban McMansions. But we are personally experiencing an inversion. We invest in Seattle and I've watched neighborhoods go from hooker to hipster. In the bay area, where we live now, San Francisco rents and prices exploded, which overflowed into an Oakland renaissance. Where do the poor go? Further out to where they now can afford to live. It makes me wonder if the suburbs might just end up our new ghettos. I don't see large companies moving their HQs to suburbs as they did in the past, but rather closing their branches to centralize in major metros. Where the jobs go, people follow. For the long term investor, where should we park our chips?

I honestly think the only thing that might END the suburbs is school vouchers or other massive change to the education system. The reason I am skeptical that those young families in DC will stay in DC once their kids hit school age is that DC has some dreadful schools. There is a street in Hartford/West Hartford Connecticut that is the border between the two municipalities. It is Hartford on one side, West Hartford (a separate city; a suburb of Hartford) on the other. Both sides of the street lined with some great old Victorians. Tree shaded street with wide flagstone sidewalks. Obviously both sides of the street are equally proximate to jobs, restaurants, cultural attractions, etc. The houses on the West Hartford side of the street, on the rare occasions they come on the market, are worth 2 to 2 1/2 times as much as the houses on the Hartford side. ANd this is a great improvement; 15 or 20 years ago they were worth often as much as 3 or even 4 times as much. And the reason is schools, period. West Hartford has excellent public schools, and Hartford dreadful public schools. In spite of the fact that more dollars are spent per student in Hartford. So if you buy on the Hartford side of the street, you either have non kids (huge old Victorians; not likely) or you have to price in private school tuition.

I guess it can be area dependent. Here where I am the suburbs are alive and well. In fact growth is incredible and the areas keep getting better and better. Some people do not want to live in urban core......... : ) I like my privacy and peace and not feeling like I am in a footprint squished in like a sardine to fit. Some people enjoy the extreme hustle and bustle. I love serenity. If anything we have more crime here in the downtown cities close to Atlanta. That element couldn't afford in masses to live in the burbs here in nice areas. Maybe Cali is shifting like you say but I do not see a whole country phenomenon happening with that.

@Shane Pearlman Here in Riverside County, there are developments coming up everywhere and they are still extending out futher South towards San Diego. Inland Empire is catching fire, theres tons of new apartment buildings coming up. Lake Elsinore is gearing up for a huge development also. Corona has 3 very huge developments in the 5 yrs....If these builders have it wrong they stand to lose alot of money. I think Suburb living will get bigger as time goes by, there will always be the old and the young. And when the young get old and tired of fast LA, they will move out to the suburbs where its peaceful. And i see a huge rise of married couples with kids moving out towards the suburbs, they want big houses for cheaper price. The only issue may be that the bulk of jobs are in the city. However tons and tons of commericial real estate is being built in Riverside county area in hopes more jobs moving out that way. I for 1 hope what your saying dosent happen i love the suburbs, you make some very valids points, it will be interesting to see...

I'm with Joel on this. In Atlanta I see, not the opposite, but a different trend, more like 'hubification' rather than urbanification. The rural areas are what's losing out. Folks are moving intown. 'Intown' is pushing outward from trendy Atlanta neighborhoods out to the southeast (IP Decatur neighborhoods like Belvedere & Midway) and southwest (West End/Adair Park) in what used to be city suburbs, with 1950s-1980s SFHs. At the same time, the satellite areas are alive and growing solidly -- there are a number of Dekalb County areas wanting to incorporate their own little cities, and further out, metro suburban like Peachtree City and Dunwoody are thriving, related to but also somewhat independent of Atlanta proper. I think that's the medium-trend here. In 15 years? Anybody with more ATL experience

@Shane Pearlman , Not sure I'd call it the end of the suburbs, but I think the trend is alive and well and has been in full effect for years now, especially on the West Coast. I am amazed at what is happening in some of the formerly very rough neighborhoods in Central Los Angeles that I never would have dreamed of 15 years ago. There was an article in today's LA Times on such a neighborhood. I saw in a Bay Area newspaper last year how real estate had performed across the Bay Area since the end of the recession. The more expensive inner city areas had vastly outperformed the cheaper outer suburban areas. I think this goes against conventional wisdom since people think that most buyers would choose bigger lots and less crowded areas with cheaper homes. Lots of reasons why starting with the fact that millennials don't want to sit in a car 2 hours a day and have largely rejected the cookie cutter nature of the suburbs and even home ownership to an extent to the rise of childless couples and delayed child bearing. Of course this doesn't mean every inner city neighborhood will turn to gold and every exurb will turn to dust. Not at all.

Outer suburbs have become less attractive as the expense of commuting, in money and time, has increased. But I don't think that means an inevitable trend toward urbanization. And the reason is the impact of technology. The area I live and invest in is a rural area on the far outer reaches of the Boston commuting zone. And virtually everyone I have met who has moved here in the last several years shares two characteristics in common. They are attracted to small town/rural living (and the generally good schools and very low crime rates that come with it) and they (at least one member of the household) works primarily from home. As more and more people work largely on-line (and that really is something close to inevitable; the internal and external costs of the current "commute to an office building" model are hard to justify) then more and more people will be able to live in whatever environment they like. And that will not mean cities for all of them. I do think there will be changes. The most stereotypical, soulless suburbs will have to adapt. Become more "urban" in some ways. Mixed-use development, no more huge subdivisions of virtually identical SFRs, real town centers. Become more like villages. Villages have been the basic human habitat for thousands of years; it is only when economic factors require it that people choose to live either very remotely from others, or in crowded cities. The other thing that will matter is climate. If you can live anywhere at all, how many will choose places that are cold? I don't really foresee a re-population of the Great Plains. The only thing keeping many from moving South now is the form development has often taken there. My firm asked me at one point if I would be interested in taking over our Dallas office. Honestly, Dallas is something close to my vision of Hell on Earth (sorry Texans). And large parts of Florida are even worse. And Vegas is no place and no way for humans to live. So my prediction for the future is that there will be many places like Celebration, Florida, only without the same degree of rigid central planning. Villages with walkable centers, mixed-use buildings, density greater than a traditional exurb but way less than a city, largely in places with good weather.

It's an interesting question and one I've been pondering myself. Gas is expensive. Traffic sucks. And thanks to the drought my lawn looks like crap. So why wouldn't I want to live close to downtown? (Answer: I hate crowds and I work from home so I'm not overly concerned about traffic. But a trend I do not make.) Another aspect of this tend would be these new shopping centers that are designed to look like fashionable, graffiti free, downtown areas instead of the malls we grew up with. Several of them include residential space so you can walk to your shops and restaurants even though you're really out in suburbia.

The END of the Suburbs?

David Krulac

Mechanicsburg, PA · Member since 2013 · 3k+ posts · 2k+ votes

11y

@Matt R.

AND PA doesn't tax retirement income!

Another consideration for people who are retired

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David Krulac

Mechanicsburg, PA · Member since 2013 · 3k+ posts · 2k+ votes

11y

@Jeremy T.

according to Neigborhood Scout none of the top 10 schools in Pa. are within 300 miles of Pittsburgh. Just saying must be a very long commute for you!

http://www.neighborhoodscout.com/pa/schools/

The END of the Suburbs?

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