What Happens When a Bunch of Real Estate Editors Get Together? Too Much!

Was in San Antonio last week at the National Association of Real Estate Editors conference getting a state of the real estate market report. They kept us hopping busy, and plugged the heck out of San Antonio. What can I say, San Antonio actually HAS a river walk!

The next great frontier in real estate is re-newal and re-use of urban and infill developments. Financing real estate will continue to be a challenge for years. Key “RE” words in the “new real estate era”: re-use, re-develop, re-design.

When we compute housing affordability, we need to start figuring in transportation jobs. Here’s an eye-opener: housing costs in Francisco and San Antonio are virtually the same when you figure in transportation to work, and in SA that would be in a car. Living close-in is getting more appealing, as we saw¬†visiting a brand-new high rise condo in downtown San Antonio called the Vidorra in St. Paul Square — 55% sold out. The outer-ring “exurbs” continue to suffer with lower home values, more foreclosures. But if you snag a cheap home there, you still have to drive forever to get to work. Where is the savings as transportation costs go up? Plus commuting creates high environmental costs.

We will see more development in downtown and exurbs; this will be a renaissance to many¬†urban cores that actually made great strides over the past 20 years¬†as downtown’s experienced¬†lower crime rates and acquired the amenities Americans prefer in higher density mixed use demand.¬†Living “downtown” will be expensive,¬†but there is a huge opportunity in the so-called¬†inner ring suburbs for¬†re-development to produce more affordable housing. Inner ring suburbs are in a sweet spot for re-development — they have a distinct urban feel, easy access to shopping, transit and entertainment, and are employment hubs for anchor institutions, such as the “eds” and “meds”. Great excample: Pittsburgh.

The two major age groups driving real estate are the 75 million baby boomers and 80 million-strong millenniums, their offspring, who are tech-savvy, environmentally conscious, value community and will give up space for convenience.

The millenniums do not want McMansions.

Here’s a shocker: Boomers are aging differently. They are less likely to retire, and are living and working longer. They may own several homes. In fact, keynore speaker Patrick L. Phillips, Chief Executive Office of the Urban Land Institute, told me he just bought a vacation condo in Steamboat Springs, Colorado.

“Now is the best¬†time to buy a second home,” he told me, “but for the right reasons.”

As a nation, we are more urban than rural. Our household size is shrinking, with the exception of the large multi-generational Hispanic families.  The US is expected to add an additional 150 million people over the next 40 years. Ergo, there is a rental and housing undersupply. There are too many houses where they are not needed, too few where needed.

A whole generation has soured on home ownership, and there are rising federal mandates to shrink your carbon footprint as energy prices rise.

We will see more high density mixed use developments — they save energy and water.

We’ll see better¬†coordination of land use planning, and efforts to renew, not build new.

The conventioanal notion of a workplace will change, with tele-computing and hand held devices.

“All of this will create a lasting change in what and where we build,” says Phillips. “Piece-mealed, poorly connected development will become a thing of the past. We can expect more concentrated development that conserves energy, water and land. We can expect better coordination of land use planning with transportation planning, so more development is oriented towards transit options.”

And the best quote of all: “Cities that incentivize redevelopment will grow strong.”