Virginia Tech

One of the major trends in the recent housing boom is that home buyers are now purchasing smaller, more urban homes to avoid long commutes, writes James R. Hagerty in a Wall Street Journal article. James Z. Pugash, chief executive officer of a company which finances housing developments, Hearthstone Inc., predicts that American cities will become European-like, with more midrise developments, fewer square feet per person, and higher housing costs.

The article also cites a 2004 paper for the Brookings Institution by Virginia Tech professor Arthur C. Nelson that says there are at least tentative signs of a rising demand for more compact living environments combining offices, entertainment, and homes. Mr. Nelson cites as an example Arlington County, Virginia, near Washington, DC. He writes that in 1990, the conventional wisdom was that the county was completely “built out” and there was no space for more residents. However, the county is encouraging higher-density housing on former industrial sites and transit-oriented development (TOD). The county is still growing rapidly, yet the character of established neighborhoods is being preserved effectively.

Speculation is that the desire for urban living in walkable communities will continue to grow, and condominium construction is soaring. In the 12 months prior to September, sales of condos and cooperative housing rose to a seasonally adjusted annual rate of 942,000 units, up 14 percent. In the same time frame, sales of single-family homes rose only 6.9 percent.

The National Association of Realtors (NAR) also recognizes that a top priority of homebuyers is to purchase a home in a walkable neighborhood. “Realtors don’t just sell homes, we sell communities and neighborhoods,� said NAR President Walt McDonald, broker-owner of Walt McDonald Real Estate in Riverside, California in a press release for the 2004 American Community >>Continue Reading This Article>>Survey.