Monday, February 3, 2014

The Death of the Suburbs and Rise of the Hipster Mom....

The common tropes of the soccer mom, cookie-cutter house and vast green manicured lawns of the Suburbs may well be gone in twenty years. The potential Death of the Suburbs has been followed by the Economist, New York Times and others. I will ague that it is likely that excitement and desire for Suburban living WILL DIE in most places.

With increasing income inequality, the desire is not to be middle class - living in a cookie-cutter Suburban house of the 1990s --but  to be upper class -- living in an Old Victorian, a house with some character, in the city center. Millenials grew up in the suburbs, we realized the suburbs were banal, lonely and lacked the character and excitement of city living.

I argue that there will be a break in our generation quite early-on between the haves (20%) and have nots (80%). The haves will live in and around city centers - they will have amenities that are all walkable.  The Suburban mom trope, especially of the Midwest, centered around privilege associated with being middle-class and white will be replaced by the Hipster mother which centers around socio-economic status.

The Hipster mom will be relatively well educated with a masters of professional degree. Generally having a career, they will be more liberal than the Suburban mom and will try to expose their children to a variety of diverse foods and cultures, yet still living in a mostly homogenous world. They will be a much smaller portion of the population than the Suburban mom, but still a strong voice in the political discourse. Many will have only one child. Gentrification will push the poor and middle class out of the center of the city toward the outskirts, the suburbs. There will be much less excitement about being middle class - the goal will change to being rich or affluent, if it is not that already!

Baby Boomers need to be especially wary of these potential trends. What happens when you have no buyers for your suburban homes? Prices fall. Baby Boomers should spend more time thinking about the possibility that they might not be able to sell their Suburban houses to Gen Xers and Millennials when they retire. "The average net worth of someone 29 to 37 has fallen 21 percent since 1983; the average net worth of someone 56 to 64 has more than doubled....For the first time in modern memory, a whole generation might not prove wealthier than the one that preceded it." NYT

Currently, most millennials just do not have the money to buy those houses and doubt that will change anytime soon. In addition, most wealthy Millenials are looking for houses in 'urbanish' areas that will probably not change if they have fewer children than past generations (very likely). Gen Xers and Millenials will eventually become the majority of buyers in the market and have accumulated much less wealth than Baby Boomers.

At some point, the rubber must hit the road. When consumer demand and ability to purchase houses falls, prices will also fall. "By 2030, some 26 million baby boomer households expect to sell their homes and retire, according to a recent Bipartisan Policy Center report." (The Fiscal Times)  If I was a Boomer, I would think about selling sooner than later. You may get much less than you expect from millennial homebuyers.


No comments:

Post a Comment