In Canada’s cities, prices in the older urban areas as well as the suburbs generally stagnated for over a decade between the early 1990s and early 2000s. Not coincidentally, during this time an abundance of new housing opened in suburbs like Milton and Markham (Toronto area) as well as Coquitlam and Surrey (Vancouver area). Calgary annexed more land, and suburban style homes proliferated. Metro area residents did not seem to show much of a preference for urban vs suburban living.
Starting in around 2002 prices everywhere began to rise, but over time the urbanized areas experienced more rapid increases. I know of homes in walkable East Vancouver communities that tripled in value over just 6-7 years.
From talking to friends and realtors, it seems that today, the housing market is hot in walkable urban areas, and a softer in the suburbs. Evidence of continued strong demand for urban living.
As pointed out by the Economist this week in a cleaver parable about Gotham vs Pleasantville, rising house prices rising faster in in urban areas vs the suburbs are a clear indicator of accelerating demand for these urban homes. Many urban areas have limited or no room to increase supply, so if demand rises so do prices as those with the most money are able to secure the most walkable, transit oriented homes.
So what changed in or around 2002?
What has led an increasing number of home buyers to have a preference for urban living?
Here’s my partial list. Please add to it!
- Maturation of the knowledge economy, reliant on the internet, that has benefited from a very urban workforce constantly looking for inspiration
- De-industrialization in many metro areas as manufacturing declined either outright or as a percentage of employment (while service and knowledge jobs grew)
- Generations X and Y started to make their ideas and culture felt in cities, as they embraced an experience economy over a consumer goods and large-home-and-car based one.
- Women’s higher rate of degree attainment resulted in career women selecting short commutes and urban living (with the trade offs) over suburban homes
- The fertility rate edged up slightly, likely as younger boomer and older gen x women who had postponed children had 1 or 2, but didn’t give up urban living or urban careers and wanted short commutes.
- Millennials defining freedom as their “first iPhone” rather than first car, and driving less.
- More recently in 2008 and now in 2011, high gas prices are encouraging more people rethink auto-motive lifestyles
Agree? Disagree? What else has changed?