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01-22-08 1B Market Study
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01-22-08 1B Market Study
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1/18/2008 11:19:37 AM
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1/18/2008 11:17:07 AM
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Market Study by Maxfield Research
General - Type
Agenda Item
Date
1/22/2008
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<br />CONCLUSIONS AND RECOMMENDATIONS <br /> <br />The baby boom generation will have the biggest effect on the housing market in the Arden <br />Hills Market Area as they continne to age. Baby boomers are currently 44 to 62, and as they <br />age over this decade, they will increase the population in the age groups 45-54 and 55-64. Some <br />of these baby boomers will prefer more expensive single-family homes, while other may <br />prefer to downsize or find maintenance-free alternatives. With the baby bust generation fol- <br />lowing in the baby boomers' wake, the age group 35-44 will decline, lessening demand for <br />move-up housing. <br /> <br />General-Occupancy Housing Demand Analysis <br /> <br />Table 29 and Table 30 present our demand calculations for general-occupancy housing in the <br />Arden Hills Market Area between 2008 and 2020 and the estimated number of units supportable <br />in the new TCAAP development. Table 29 calculates demand for for-sale housing while Table <br />30 calculates demand for rental. The following points summarize our demand calculations. <br /> <br />For-Sale Demand <br /> <br />~ <br /> <br />Much of the Market Area demand will be captured by Blaine, Lino Lakes, and other sub- <br />urbs with a greater available land supply for new development. Arden Hills' primary <br />ability to accommodate new development will be in the TCAAP site, which should <br />be a very attractive location for potential residents. We project Arden Hills could cap- <br />ture 10% of the Market Area demand, or just over 800 single-family homes and about <br />670 multifamily units. <br /> <br />~ <br /> <br />According to our projections, the Market Area is expected to grow by 19,410 households <br />between 2008 and 2020. Based on demographic growth trends, we estimate that 90% of <br />the demand will be for general-occupancy housing versus age-restricted (senior) housing. <br />While growth of the senior population will outpace that of the younger population, most <br />of that "growth" will be among current residents who are likely to want to remain living <br />in their existing homes. The vast majority of demand for new homes - we estimate 90%, <br />- will come from younger and middle-aged people moving into the area. <br /> <br />~ <br /> <br />Based on recent homeownership and demographic trends, we estimate that 85% of the <br />general-occupancy housing demand will be for ownership products (i.e., single-family <br />homes, for-sale townhomes, cooperatives and to a lesser extent, condominiums). This <br />equates to demand for about 14,850 ownership homes between 2008 and 2020 in the <br />Market Area. <br /> <br />~ <br /> <br />Given cnrrent high development costs, virtually all single-family homes developed in <br />the Market Area will be higher-priced homes marketed toward move-up and execu- <br />tive buyers. Based on recent trends, we project that 65% of the single-family demand <br />will be for move-up homes (priced between $325,000 and $525,000) and 35% will be for <br />executive homes ($535,000+). In order to afford a $325,000 home, a buyer will have to <br />have an income of approximately $93,000. A buyer will need an annual salary of <br /> <br /> <br />MAXFIELD RESEARCH INC. <br /> <br />73 <br />
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