I just received an article from my wonderful brother-in-law, who is one of my financial gurus. It was from The Wall Street Journal and the title of it was, “A Decade After the Housing Bust, the Exurbs Are Back.” I thought this was a really interesting article and I wanted to talk to you a little bit about it today.
First, homebuyers are often looking further away for affordable housing than they used to, even if that means a long commute. As affordability becomes more of an issue in our market, people are having to look further out.
Another really interesting thing I saw was this statistic: Last year, Maricopa issued permits for nearly 1,000 new homes. In the depths of the housing downturn in 2010, it issued only 110. We’re seeing very similar trends take place in areas like Florence, too.
The article also states that “Rising mortgage rates and home prices, especially in urban centers, are going up so much so quickly that it’s now starting to motivate more people to look further outward.”
They quoted an analysis by the National Association of Home Builders that shows single-family home construction rose nearly 7% in outlying, or exurban, areas in 2018 compared to a year earlier. Home building overall rose less than 3% in that same period. These buyers, often millennials and retirees, purchased homes on average more than 16 miles from central business districts in 2018—the greatest distance since 2004, according to Fannie Mae loan data.
While a lot of people are saying that this sounds so much like the market in 2006 before the great recession, there are a lot of safeguards in place right now in the lending world that will keep that false bubble from occurring again.
I want to close with one final idea from this article. It says that exurbs historically blossom late in the housing cycle. Are we in a housing cycle that’s going to start leveling off, or will it keep going up? From all that we can see, there is no bubble on the horizon. None of those things that were happening during the great recession are happening now, but it is an interesting thing to look at.
There is a ton more interesting information in this article. If you want to check out the full article, just reach out to me and I’ll send you a copy right away.
If you have any other questions for me about the current state of our exurb market or anything else related to real estate, don’t hesitate to reach out and give me a call or send me an email. I look forward to hearing from you soon.