The present energy crises are taking a serious toll on nearly all aspects of our everyday lives, from how much we pay at the pump, to the surcharge airlines have implemented for checked baggage, to how our investments are performing in the stock market.  But we foresee even more far-reaching effects to the high price of oil, and that is the future of the American suburb.  As the price of gas rises daily, long commutes in big cars will become increasingly untenable.

There are, perhaps, other factors that may encourage an increased interest in urban living.  Nationally speaking, there is a demographic decline of families with children.  Not having to factor children in the decision of where to live means that more people don’t have to think about a good school system (which is typically better in the suburbs); they don’t have to shop for a big home with a big yard; they can be closer to more social and cultural activities (which is typically of a higher caliber in an urban setting).  In addition, as more and more baby boomers become retirees, they will most likely be interested in a different style of living—smaller housing, closer to medical care, as well as other necessities and conveniences.

Does this mean this is the end of the American suburb as we know it?  Probably not.  It does mean that more people are re-thinking the way they want to live, and this can create an opportunity for a savvy real estate investor to catch the start of a trend.  And keep in mind, this is a general overview; there are still places in this country where the suburbs are growing:

-        The Sun Belt boasts the highest population growth in the country, thanks mainly to a growing Latino population (e.g. San Antonio, TX).

-        Development of light rail and other public transportation is a good indication that the local government is interested in building a strong foundation for the community.  In addition to help ease the cost of commuting, it also creates jobs, and is environmentally friendly (e.g. Charlotte, NC).

-        In recent years, many affluent suburbs have created their own employment centers that compete successfully with larger and more established CBDs (e.g. Plano, TX)

For related articles and information:

Stepford No More: The Death of Suburbia

Tight economy could curb urban sprawl

Current Buyers Seem to Prefer Downtown Versus Suburban

Weekly U.S. Retail Gasoline Prices, Regular Grade

Questions?  Comments?  Contact Us!

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Ofer Goldenberg is the Owner and CEO of Capital Growth Investment.