If every market — and especially real estate — is cyclical, then this is the time for in-town houses within walkable distance of schools, shops, and transportation. National surveys as well as the experience of Princeton-area real estate brokers point to the trends forged by the wave of Generation Xers (born from the 1960s to the ’80s and Generation Ys (from the ’80s to 2000s), as they forsake the five-acre lots and sprawling yards of their suburban-style Baby Boom-generation parents.
“The Gen Y’s want bars, shops, and restaurants, not the two-acre colonials they grew up in,” says Kim Ward Bacso of Lambertville’s River Valley Realty. “We are finding that even New York City second home buyers who used to come out looking for old stone homes in a rural area are instead now choosing Lambertville or Frenchtown.”
The trend has been noticed not only by residential real estate agents, but by people studying commercial real estate, as well. In a December, 2012, report written by James Hughes and Joseph Seneca of Rutgers’ Bloustein School of Planning and Public Policy, the authors note a similar disconnect between the Baby Boomers and their progeny: “Their offspring — the babyboom echo (also labeled echo boomers, Gen Y, or Millennials) — is about to enter its period of workforce dominance. They are considerably less suburban-centric than their parents were at the same age in terms of both residential and workplace preferences.”
But if this real estate market really is cyclical, then it may also be possible that the big house in the manicured lot may eventually return to pre-eminence.
Another professor of planning at Rutgers, Robert Burchell, quoted in a May 15 Wall Street Journal article, takes a different view of the data showing the movement of Generations X and Y to smaller houses in in-town locations. He notes that both Y and Xers have more debt on average than the Baby Boom generation did, and that they have not been in a position to profit on gains from previous housing booms. “Generation X and Y cannot afford to buy the houses of the baby boomers,” Burchell was quoted as saying. “It’s not like this is a new generation steeped in money, ready to take on the world and has now declared ‘urban is our location.’”
Suzanne Dustin, manager of Gloria Nilson’s Princeton Junction office, fully appreciates the appeal of in-town living in a walkable distance to schools and shopping. Her listing at 30 Chestnut Street in the “tree street” area of Princeton, a half a block from Nassau Street, has just gone under contract. (A four-bedroom, three-bath single family, it had been listed at $789,000.)
But, Dustin says, the area that is “on fire” right now is West Windsor, where buyers are attracted first by the schools, then by the train station, and also by the housing stock that is no more than 15 to 20 years old and that has lots of space and big yards. “Everyone has a fantasy about living in-town,” Dustin says, “but the reality — especially for people in the $550,000 to $700,000 price range — is that they are going to be looking at older houses, often ones that need work.”
Out in Lambertville and Hunterdon County, a world away from West Windsor, River Valley Realty’s Kim Bacso finds buyers from both ends of the demographic spectrum but with a common interest: “walkability,” she says. “Town centers are the bullseye areas that are hot, whereas the surrounding concentric area has more inventory and fewer buyers. Buyers have continued interest in a property’s distance to coffee shops, restaurants, and shops. Examples of these ‘doughnut holes’ are Hopewell Borough and Pennington, which are hotter than surrounding rural Hopewell Township. Lambertville is hotter than rural Delaware and West Amwell, and Stockton is hotter than Delaware Township.”
Adds Bacso: “I see this spring market as a combination of continued lower interest rates, pent up demand, and that first group of first-time buyers who are the ‘engine that pushes the train.’ But this engine is running much faster in walkable communities.”
Bacso compares two properties recently sold through River View Realty. In Hopewell Borough — the “hole in the doughnut” — 26 Hart Avenue went under contract with multiple offers in 10 days.
But 186 Marshall’s Corner Road in Woodsville, in the Harbourton section of Hopewell (the most rural section) needed a price reduction before going under contract with about four months marketing time.
She reports a similar experience in Lambertville, where a multi-family had 30 people at its first open house, as opposed to a multi-family in excellent condition on three acres on a country road in Delaware Township that has had only a half dozen showings in six months. “Without question,” says Bacso, “location and walkability are the driving factors.”
Some of the same thinking may apply to the sizes of homes. “I also see renewed interest in older homes,” says Bacso, “in part because they are often located within walking communities, but also because they are ‘right sized.’ In my market area, which tends to attract artists and fewer traditional buyers, the 3,000-square-foot Colonial with palladium entrance is a harder sell.
“My Hunterdon and Hopewell clients are willing to have smaller rooms in exchange for charm, strong community, and a pleasant stroll through town for a good cup of coffee,” she says.
So what will it take to sell your house in this market? Will you have to hope that an urban-chic coffeehouse opens at the end of the cul-de-sac? Or do you pray for a contractor who can magically transform a 100-year-old bungalow into a gleaming model of 21st-century convenience? You probably will not need a miracle of any sort.
Gloria Nilson’s Dustin notes one constant of the fast-changing scene: “If a house is staged properly and priced right, it will sell.”