By S.E. Slack
For five years, city after city has fallen into craters that many feared could never be crawled out of. The economic downturn has pulverized the Motor City, for example, into a defeated shell of the metropolis it once was. But some say that despite that particular city’s free fall, other cities across the country are not only rising back up but coming back with a fierce intensity. Like with all things real estate, it all comes down to location.
Americans, according to Forbes Magazine writer Joel Kotkin, continue to move decisively to both lower-density, job-creating cities and to those less dense areas of major metropolitan areas particularly where single-family houses, good schools and jobs are plentiful.
Kotkin cites New Orleans as a prime example of where the population of a core city has grown more in total number than its adjoining suburbs. Although the city is still far below 2002 population numbers, it has grown nearly 30 percent since 2007.
New York; San Jose, Calif.; Providence, R.I.; Columbus, Ohio; and San Antonio also show core populations that have grown more in total numbers in recent years than neighboring suburbs. Not all suburbs are suffering, of course. They continue to attract people despite slowed growth over the last decade. But locally, expectations aren’t very high.
While Huron County has experienced a 4.3 percent increase in population since 2000, local list prices have once again begun dropping precariously close to 2010 lows. Home owners are finding it difficult to remain optimistic as 2014 comes onto the horizon.
Much of this slowing is due to affordability levels starting to decrease from record highs.
“With mortgage rates well below 4 percent for roughly the past two years,” said Svenja Gudell, director of economic research for Zillow, “consumers had an incredible purchasing power boost, as home affordability was at an all-time high.”
But, she warns, rates will likely be above 5 percent by the middle of next year. That puts some buyers out of reach of homeownership and can further delay housing recovery in cities like Norwalk, where the housing market is already embattled.