This morning, a Minnesota Public Radio host asked me if the exurbs, whose growth rate flattened when the recession hit, are going to come back. Lots of people from far-distant suburbs like Blaine and Farmington called in, saying they like the way of life out there – they like having acres of trees buffering them from their nearest neighbor — and people won’t want to stop living in communities like that.
The data suggests otherwise, though. Earlier this week, the Demand Institute (a think tank created by the Conference Board — “a global, independent business membership and research association” — and Nielsen — yeah, the TV ratings people) released a report on the housing recovery. They say the worst of the housing crash is over and glimmers of recovery are on the horizon. But hope isn’t spread out uniformly across these United States. Those exurbs like Blaine and Farmington, Minnesota? They’re not coming back so fast.
Urban areas didn’t lose as much value during the recession. Home prices didn’t crash so hard. Not so many people found themselves under water, owing more on their mortgages than their homes are worth. And urban areas are bouncing back faster. The Demand Institute calls these places “Resilient Walkables.” Only 15 percent of the U.S. population lives there.
The report bases its prognosis for recovery on seven factors: population size, walkability, severity of the crash, current affordability, unemployment, foreclosure inventory, and foreclosure policy. The Institute found what Angie noted earlier: Walk Score is positively correlated with strong housing prices. The Institute’s analysis of almost 1,700 U.S. cities showed that walkable cities had more positive price growth.
And it found that these “Resilient Walkables” were resilient indeed, with house prices projected to rise three percent next year and five percent a year for the four years after that.
Compare that to the places the Institute calls “Slow and Steady” – where more than a third of Americans live and where double-digit housing declines destabilized the market. Economic indicators are gloomy for these areas, but the authors find the planning solid, so the future is relatively bright. These are places like Charlotte, NC, Dallas and semi-urban D.C. suburbs like Gaithersburg, MD, and the study forecasts three percent growth starting in two years.
Then there are the “Damaged But Hopeful” areas – a category that encompasses big but depressed cities like Chicago and smaller ones like Stamford, CT. Thirty percent of Americans live in these places, too many of them fighting foreclosure. It will take them a little longer to get to three percent growth but from 2017 onward, the Demand Institute predicts that they’ll beat the national average.