Home values are once again rising steadily, and with that comes more buyers. Aside from room for their family, what do these buyers want in a tighter market? An easy commute, mainly.
According to CoreLogic, a global real estate industry analyst, U.S. home prices rose 11.3% in the fourth quarter of last year compared with a year earlier.
"Limited construction of new homes and low inventories of existing homes for sale contributed to the jump," says David Stiff, principal economist for CoreLogic Case-Shiller, which co-produces a quarterly reading of the nation’s housing market. "Developers remain cautious about building too many new houses until they see stronger demand in their markets."
Stiff also says that more "traditional buyers" are entering the housing market, even as speculators and investors leave it, and it’s known buyers who actually move into their houses and build lives there want certain things.
At the top of the list is a good commute to work, followed by neighborhoods filled with skilled professionals who help raise the profile of the community and thus the value of homes.
"Seventy-three percent of recent homebuyers said that commuting costs were an important factor when deciding whether or not to purchase," says Jessica Lautz, an economist at the National Association of Realtors.
To accommodate that desire for an easy commute and draw more skilled professionals to a community, real estate developers need to follow up on long-known desires to have shops, restaurants and transit within easy walking distance, says Lawrence Yun, chief economist at the National Association of Realtors.
"Skilled workers move where they can find work, creating more traffic and driving up housing prices," Yun says. "It creates a positive feedback loop; the more skilled workers employed in an area, the more others want to move there."
This article was republished with permission from TheStreet.