As More "Rooted" Americans Stay Put, Adaptability Becomes a New Home Non-Negotiable

This story was originally published in Builder.

Americans are staying put longer.

The reasons are not altogether clear. However, this "rootedness," or decline in mobility--by half since the 1950s--has big implications, for both the new-home and remodeling and renovation business sectors.

Two data sources, the Census American Community Survey and Attom Data Solutions' Q3 2018 U.S. Home Sales Report track residential tenure's upward trajectory.

The Attom Data analysis, from senior VP Daren Blomquist, plots steady gains starting toward the end of the Great Recession in 2009 and continuing upward to an all-time high rate of tenure this past third quarter. Blomquist writes:

U.S. homeowners who sold in Q3 2018 had owned their homes an average of 8.23 years, up from an average homeownership tenure of 7.97 years in Q2 2018 and up from 7.98 years in Q3 2017 to a new record high going back as far as homeownership tenure data is available, Q1 2000.

Outliers--at both the low end of the ownership tenure spectrum, and for metropolitan areas that have gone in the reverse direction over the past year--include Oklahoma City, Oklahoma (6.31 years), Denver, Colorado (7.17 years); Colorado Springs, Colorado (7.18 years); Austin, Texas (7.24 years); and Provo-Orem, Utah (7.24 years) for the former group, and Boston, Phoenix, Seattle, Denver and Nashville for the latter.

It's New Geography contributor and demographer Wendell Cox who unpacks residential tenure from the Census ACS, looking both at renters and homeowners. In this data set, figures are higher, with a median tenure among owner-occupied households of 12 years, and a median tenure for renters of 2 years. Cox, at a high level, draws a couple of conclusions about how variances from those medians might be explained using a geographical lens.

"There are some major metropolitan areas --- and areas within them --- that have fewer people move in and out than others. US households tend to live longer in their present residences where population growth has been more modest. The data also indicates that across all major metropolitan areas, households tend to have lived longer in suburbs and exurbs than in the urban core."

Now, Brookings' fellow William Frey looks at the opposite side of the same demographic coin, noting here that U.S. migration rates are at historically low levels, and offering some of the reasons (which home builders, developers, and remodeling firms should take note of).

Annual movement within the U.S. is stuck at a postwar low rate of 11 percent. This 2016-2017 rate is not statistically different than the 11.2 percent rate of 2015-2016, the lowest mobility rate in any year since this annual series began in 1947-48 (see Figure 1). The decline in annual mobility rates, from over 20 percent during some years in the 1950s and 1960s down to almost half that today, is the result of long term trends, such as the aging of the population (older people move less than younger people) and rises in homeownership (owners move less than renters). Yet the downward mobility trend of the last decade can certainly be tied to the lasting effects of the Great Recession and housing bust which occurred over the 2007-2009 period.

While gross mobility and migration rates don't necessarily tie to new home demand, net in-migration to some marketplaces, say, with particularly robust economic growth patterns certainly equate to job- and household formations that lead to new home demand.

What the "rootedness" trend--of 10 or more years of ownership--really means, for community and floorplan design, pricing, and livability appeal of new homes, is this:

• People want homes with floorplans that are nimble--both in real-time and over time. This means they can adjust accommodations for guests or revenue potential for either short-term stays, or for a lengthy "sandwich generation" experience of hosting parents or adult children for an extended stay.
• People want future-proof systems, which means they're able to update and upgrade through the years as technology improves, without extensive structural work. For the near-term future, heating, ventilation, air conditioning, plumbing, electric, connectivity systems will need to learn to adapt and leverage firmware to upgrade, course-correct, and self-repair. They'll also have to be accessible without requiring major reconstruction, which changes where mechanicals run and how to get access to them. People want durability, essentially demanding that building enclosures stand up to climate and conditions, retaining aesthetic appeal throughout more extended homeownership tenure periods.
• People want componentization. When appliance systems or bathroom systems run their natural course, or when the lifestage needs of a homeowner changes--aging, kids moving out, in-laws moving in--more homeowners will want to be able to adapt these systems by popping out current fully-equipped components, and popping in new ones. Again, a combination of lifestyle and economic need will cause buyers to gravitate to home floorplans that can adapt, both instantly and for an extended period.

All of these future-proof features and capabilities figure prominently in our KB Home ProjeKt, which is in the final stages of preparation for its "close-up moment" in the Las Vegas-area masterplanned community of Inspirada. The home contains more per-square-foot innovation--in future-proofing, health-and-well-being features, and adaptability--than any production home of its kind. We're so proud of the KB Home team, and key partners KTGY Architects and Anderson Baron, as well as title sponsors Whirlpool and Delos and founding sponsors Carrier, Eldorado Stone, Timberlake, Weyerhaeuser, Entekra, MiTek, and Fortress.

The home lights a pathway to production homes of the future--where attainability, sustainability, and a smart healthy structure--is achievable because of the extraordinary level of adaptability, durability, and upgrade-ability of its structure and systems.

It's #wheretomorrowlives.

This story was originally published in Builder.