01-22-08 1B Market Study - Laserfiche WebLink

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CONCLUSIONS AND RECOMMENDATIONS The baby boom generation will have the biggest effect on the housing market in the Arden Hills Market Area as they continne to age. Baby boomers are currently 44 to 62, and as they age over this decade, they will increase the population in the age groups 45-54 and 55-64. Some of these baby boomers will prefer more expensive single-family homes, while other may prefer to downsize or find maintenance-free alternatives. With the baby bust generation fol- lowing in the baby boomers' wake, the age group 35-44 will decline, lessening demand for move-up housing. General-Occupancy Housing Demand Analysis Table 29 and Table 30 present our demand calculations for general-occupancy housing in the Arden Hills Market Area between 2008 and 2020 and the estimated number of units supportable in the new TCAAP development. Table 29 calculates demand for for-sale housing while Table 30 calculates demand for rental. The following points summarize our demand calculations. For-Sale Demand ~ Much of the Market Area demand will be captured by Blaine, Lino Lakes, and other sub- urbs with a greater available land supply for new development. Arden Hills' primary ability to accommodate new development will be in the TCAAP site, which should be a very attractive location for potential residents. We project Arden Hills could cap- ture 10% of the Market Area demand, or just over 800 single-family homes and about 670 multifamily units. ~ According to our projections, the Market Area is expected to grow by 19,410 households between 2008 and 2020. Based on demographic growth trends, we estimate that 90% of the demand will be for general-occupancy housing versus age-restricted (senior) housing. While growth of the senior population will outpace that of the younger population, most of that "growth" will be among current residents who are likely to want to remain living in their existing homes. The vast majority of demand for new homes - we estimate 90%, - will come from younger and middle-aged people moving into the area. ~ Based on recent homeownership and demographic trends, we estimate that 85% of the general-occupancy housing demand will be for ownership products (i.e., single-family homes, for-sale townhomes, cooperatives and to a lesser extent, condominiums). This equates to demand for about 14,850 ownership homes between 2008 and 2020 in the Market Area. ~ Given cnrrent high development costs, virtually all single-family homes developed in the Market Area will be higher-priced homes marketed toward move-up and execu- tive buyers. Based on recent trends, we project that 65% of the single-family demand will be for move-up homes (priced between $325,000 and $525,000) and 35% will be for executive homes ($535,000+). In order to afford a $325,000 home, a buyer will have to have an income of approximately $93,000. A buyer will need an annual salary of MAXFIELD RESEARCH INC. 73