The consensus seems to be that the US housing market will be stuck in the ditch until at least then.
And when it recovers it will likely look considerably different from the McMansions that were churned out during the bubble boom years.
While the real estate markets in many other countries (like here in Canada) haven’t been decimated like the US, we’re still subject to the same global trends that will affect our future.
If you’re planning on buying, renovating or selling your home in the next decade here are a few trends to keep in mind that will come into play no matter where you are on the home ownership spectrum.
Priorities have changed
It used to be that the mortgage payment trumped all others if you came up short. No more. The car payment has become the top priority of many cash-strapped US households. Why? Many people need their car to get to their job. In too many cases, they’re also living in them.
Workplaces can be miles from city centres and the declining public transportation system doesn’t always work out for people on evening or Sunday shifts, or get them to a job in an industrial park. Reliable transportation can mean the difference between getting and keeping a job and being chronically unemployed.
Millennials are a mobile bunch, at least for now – their mobile phone gives them access to everything and everybody they need to function. Being mobile is an advantage for many that are trying to break into a very tough job market, so being tied to a house is a liability for many young professionals.
Add to that, the first wave of boomers is ready to downsize into smaller, more affordable housing to compensate for the lost retirement savings (much of which was in their homes). So boomers aren’t going to be picking up the slack in the housing market.
Here just a few of the trends that home builders and real estate agents are seeing now that I think are sound long-term planning guides for home investment:
1. Increase energy efficiency – upgrading your windows, doors, insulation and heating and cooling systems are a good hedge against higher oil prices and the impacts of a changing climate. "Greening" your home will be a plus in many ways.
2. Smaller homes with built-in flexibility – open kitchens connected to family space are practical, functional and feel larger. Include a "landing zone" for keys & mail, charging cell phones, messages, etc. Multi-purpose rooms make the most use of available space.
3. Accessibility – planning for changing physical space requirements makes sense whether you’re a retiring boomer or your parents are. Doorways and ground floor bathrooms that accommodate walkers and wheelchairs top the list in this category. Think about installing lever-type door handles which are easier to use than turning a knob if you have limited dexterity.
4. Multi-generational homes – houses that have a ground floor "granny suite" can accommodate "boomerang" kids as well as aging parents. Asian and Latino cultures traditionally have more than one generation living under one roof and both of these immigrant populations are on the rise in North America. In the meantime, you can rent it out as an apartment to help pay the mortgage.
5. Back to the city – suburbs have taken the biggest hit in the US housing bust. More sustainable urban infill housing will lead the way for the recovery as the next generation seeks to live where they can walk, bike or take mass transit to work or to run errands.
No miracles in sight
No, I’m not a pessimist – I’m just a realist keeping an eye on current events. The economic malaise is still slowly swirling around the globe. It’s all connected – from the Euro crisis to China’s slowdown to the abysmal US job market. And it’s going to be a long, slow slog to get things on some sort of sustainable path.
We still have to make the best decisions we can to try to weather the storm and look for signs of better (and different) times ahead.
When it comes to your home, plan for the long haul, invest in energy efficiency, comfort and the practical conveniences that you can enjoy now – and that will be of value to the buyer when it’s time to move.