Harris Real Estate University students have been aware of the consumer shift away from the so-called McMansions.

The homes that were built by  the now aging  baby boomers. Status oriented homes that often had 5+ bedrooms and 3000+ square feet. HREU Students who are doing short sales know that a majority of their new short sale listings are these types of homes as downsizing boomers discover they have few options.

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The glut of unsold McMansions will certainly force a massive continued drop in property values. This will lead to more owners of these luxury homes to be underwater with few alternatives (if they have to sell) other than foreclosure or short sale. Refinancing isn’t an option. Millions of these homes were purchased in the last 5 years using the ARMs. Once those mortgages reset and interest rates rise….the inevitable churning of foreclosures continues.

There is a shift occurring in the housing demands of young professionals away from suburban lifestyles and a renewed interest in urban living, said  keynote speaker Carol Coletta, president and CEO of CEOs for Cities, speaking at the 11th Annual North Texas Housing Summit, hosted by the Federal Reserve Bank of Dallas. The firm’s national network of urban leaders specialize in identifying trends for metropolitan development.

Colletta’s assertions at the event included:

• College graduates are a city’s primary economic driver
• Younger generations continue to desire to live in urban, inner city communities, creating communities with a more diverse income spectrum, creating neighborhood stability.
• Stability doesn’t necessarily come in the form of homeownership, because the financial and banking systems haven’t caught up to what consumers and citizens want out of their housing options.
• The millennial generation is more likely to want to rent or own urban apartments and condominiums rather than single-family houses.

Timothy Bray, director of the Institute for Urban Policy Research at the University of Texas at Dallas,  said multi-family and mixed-use developments built near employments centers enable potential buyers to spend less on commuting, thereby releasing more disposable income. Fort Worth Mayor Mike Moncrief added that their city planners are demanding more out of developers who want to do business in the city.

CEOs for Cities is a national cross-sector network of urban leaders from the civic, business, academic and philanthropic sectors dedicated to building and sustaining American cities.

Source: HousingZone.com

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