Housing Bust Puts Brakes on Decades of Suburban Sprawl

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WASHINGTON -- Stung by high gasoline costs, outlying suburbs that sprouted in the heady 2000s are now seeing their growth fizzle to historic lows, halting American city dwellers' decades-long exodus to sprawling homes in distant towns.

New census estimates as of July 2011 highlight a shift in population trends, following an extended housing bust and renewed spike in oil prices. Two years after the recession technically ended, and despite faint signs of a rebound, Americans again are shunning moves at record levels and staying put in big cities.

That is posing longer-term consequences for residential "exurbs" on the edge of metropolitan areas.

Construction of gleaming new schools and mega-malls built in anticipation of a continued population boom is abating. Spacious McMansions offering the promise of homeownership to middle-class families sit abandoned or half-built. Once an escape from urban problems, suburban regions hit by foreclosures are posting bigger jumps in poverty than cities.

The result: The annual rate of growth in American cities and surrounding urban areas has now surpassed that of exurbs for the first time in at least 20 years, spanning the modern era of sprawling suburban development.

"The heyday of exurbs may well be behind us," Yale University economist Robert J. Shiller said. Shiller, co-creator of a Standard & Poor's housing index, is perhaps best known for identifying the risks of a U.S. housing bubble before it actually burst in 2006-2007. Examining the current market, Shiller believes America is now at a turning point, shifting away from faraway suburbs in the long term amid persistently high gasoline prices.

Demographic changes also play a role: They include young singles increasingly delaying marriage and childbirth and thus more apt to rent and a graying population that in its golden years may prefer closer-in, walkable urban centers.

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Best Cities to Buy Real Estate in 2012
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Housing Bust Puts Brakes on Decades of Suburban Sprawl

After bidding farewell to 2011, Realtors, investors and regulators the world over are no doubt wondering: Will 2012 be the year the real estate market finally rides out the aftershocks of the housing bust and mounts a full-on recovery?

There are indications that it could be. Big-time investors say that they're bullish on real estate and recent figures showing that pending home sales are at an 18-month high lend credence that view.

But even if home prices don't trend up nationwide, certain markets seem almost guaranteed to do well. Looking at a variety of sources, AOL Real Estate brings you 10 of this year's most promising housing markets for 2012. 

Location: Pittsburgh
Price: $299,900
Beds/Baths: 3/2
Sq. Ft.: N/A

MSN Real Estate lists Pittsburgh as one of the best housing markets in the U.S., pointing out that the steel town suffered practically no price decline following the housing bust and that its prices are projected to begin gaining ground relatively soon. 

This brick colonial typifies the sort of deal that you can expect to find on the higher end of Pittsburgh's market.  

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Like many Northeastern homes, its interior has a bit of an Old World feel

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Location: Worcester, Mass. 
Price: $300,000
Beds/Baths: 4/3
Sq Ft: 2,730

Tech companies are driving job growth in Worcester, according to MSN Real Estate. That may help real estate prices, which slipped 3 percent this past year, but are expected to tick up 2 percent in 2013. 

Spanning a generous 2,730 square feet, this alternatively colored home was built in 1987 and is equipped with its very own "game room," according to the listing. 

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The home features hardwood floors and a well-equipped kitchen, with ample cabinetry. There's also a sliding glass door that leads to a porch overlooking the back yard.

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Location: Kansas City, Kan. 
Price: $199,000
Beds/Baths: 4/3
Sq. Ft.: 2,123

Realtor magazine ranks Kansas City, Kan., as the most promising housing market of 2012. HousingPredictor, which the magazine used for its rankings, estimates that the Midwestern city will see its real estate prices appreciate by 5.8 percent in 2012. 

Priced at $94 a square foot, this four-bedroom delivers everything you need.

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Pictured here is the home's generously sized kitchen. 

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Location: Topeka, Kan. 
Price: $429,000
Beds/Baths: 5/5
Sq. Ft.: 4,782

Kansas seems to have fared better than most through the real estate storm. Another one of the state's major cities, Topeka is predicted to post the second-highest increase in real estate prices, according to Realtor magazine.

Here is a sprawling home in Topeka, one of the ritzier houses in town. The $429,000 home offers five bedrooms and 4,782 total square feet. 

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The home comes with a large living space bathed in sunlight through its giant windows. 

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Location: El Paso, Texas
Price: $525,000
Beds/Baths: 5/4
Sq. Ft.: 3,767

El Paso is one of a host of Texas real estate markets that have fared well during the housing crisis. HousingPredictor projects a 3.2 percent increase in home prices this year. 

This groovy, fortress-like new traditional is priced at $525,000.

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The interior has a slick modern feel. Texas chic, if you will. 

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Location: Huntington, W.Va.
Price: $175,000
Beds/Baths: 4/3
Sq. Ft.: 1,804

On the hunt for new digs in a market that's turned the corner of the housing slump? Look no further than Huntington, W.Va. HousingPredictor expects the town's real estate prices to climb by 4 percent this year. 

Throw down $175,000 for this handsome 1/3-acre property, and enjoy a thoughtful interior as well as verdant surroundings. 

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Sink your teeth into this kitchen.

Want tips on how to master real estate photography? Read some tips from a pro

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Location: Charleston, W.Va. 
Price: $349,000
Beds/Baths: 4/3
Sq. Ft.: 3,716

Charleston clocks in at third on Realtor magazine's rankings of this year's most promising real estate markets. HousingPredictor expects a 4.5 percent increase. 

Search this town and you may find yourself mulling a neat property like this 3,716-square-foot four-bedroom. 

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The home offers elegant decor with dark hardwood floors and arched doorways. 

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Location: Bismarck, N.D. 
Price: $493,500
Beds/Baths: 3/6
Sq. Ft.: 3,089

Bismarck, N.D., is also expected to perform well in the real estate market this year. HousingPredictor estimates a 3.6 percent increase in home prices there.

This home's exterior reminds us that along with some serious deals there's a tradeoff: You're going to have to cope with some very harsh winters. 

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Don't expect to have to walk very far for a restroom in this home: Its bathroom-to-bedroom ratio is 2 to 1. 

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Location: University Place, Wash. 
Price: $439,090
Beds/Baths: 3/2
Sq. Ft.: 2,058

A tip of the hat to DailyFinance for directing us to Tacoma, Wash., a city whose real estate prices are set to skyrocket, according to a Fiserv prediction. The financial services information provider projects that prices in Tacoma will jump a staggering 24.9 percent. 

Located in University Place, a suburb just outside of Tacoma, this listing offers a taste of the sort of homes that may benefit from the price boom. 

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Constructed just a year ago, the home is practically brand new. Pictured here is the house's chicly lit kitchen. 

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Location: Memphis, Tenn. 
Price: $635,000
Beds/Baths: 5/6
Sq. Ft.: N/A

Fistserv also ranks Memphis, Tenn., as one of the most promising real estate markets of the year, predicting that the city's real estate prices will appreciate by 10 percent. 

This pricey home will bring you an acre of lush land, plus a down country five-bedroom that dates back to the 1950s. 

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The contemporary delivers a pool, some woodland and a colorful interior. 

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"Suburban housing prices may not recover in our lifetime," Shiller said, calling the development of suburbs since 1950 "unusual" and enabled only by the rise of the automobile and the nation's highway system. "With the bursting of the bubble, we may be discovering the pleasures of the city and the advantages of renting, investing our money not in a single house but in a diversified portfolio."

The signs of longer-term bust are evident in places such as Kendall County, Ill., an outlying suburb of 116,000 people located about 50 miles southwest of Chicago. The nation's No. 1 fastest-growing county from 2000 to 2010, Kendall was part of an exurban wave that more than doubled Kendall's population and helped lift GOP presidential candidate George W. Bush to victory in 2004, offering Republicans the hope of a new era of conservative voters sprouting on the rural-urban edge.

By the late 2000s, however, Kendall County's growth began to wane amid recession and rising gasoline costs. The county, like many other exurbs, eventually turned to Illinois Democrat Barack Obama in the 2008 presidential race for economic answers. By 2011, Kendall County's annual growth had stalled further at 1 percent, dropping its county growth-rate rank to 236th.

Things were especially turbulent over the past 10 years for real estate agent George Richter, who has worked in Kendall County for more than two decades.

"New home construction couldn't be built fast enough," he said. "A lot of us in the industry were very, very nervous about how fast and large the annual growth rate and property value were. We knew there's no way that something could continue on." Now, he said, there's little new construction.

The Signs of Slowdown

Jeff Wehrli, a longtime Kendall County board member who runs an excavating company, said the signs of the slowdown are most apparent from devalued homes, foreclosures and a general uncertainty among residents.

"It's going to take a while," he said, speaking of a local recovery that he acknowledges will never reach the same levels as last decade. "Our economy has got to get back to the point where people can confidently sign off on a 40-year mortgage."

About 10.6 million Americans reside in the nation's exurbs, just 5 percent of the number in large metropolitan areas. That number represents annual growth of just 0.4 percent from 2010, smaller than the 0.8 percent growth rate for cities and their surrounding urban areas. It also represents the largest one-year growth drop for exurbs in at least 20 years.

By comparison, in 2006 exurban communities grew at an annual rate of 2.1 percent, compared with a population loss of 0.2 percent for inner cities.

In all, 99 of the 100 fastest-growing exurbs and outer suburbs saw slower or no growth in 2011 compared with the mid-decade housing peak -- the exception being Spotsylvania County, Va., located on the outskirts of the Washington, D.C., metropolitan area, which has boomed even in the downturn. Nearly three-fourths of the top 100 outer suburban areas also saw slower growth compared with 2010, hurt by $3-a-gallon gasoline last year that has since climbed $1 higher.

Other areas showing big slowdowns are Pinal County outside Phoenix; Barrow, Paulding and Pike counties near Atlanta; Union and York counties outside Charlotte, N.C.; and Sandoval County near Albuquerque, N.M.

"The sting of this experience may very well put the damper on the long-held view among young families and new immigrants that building a home in the outer suburbs is a quick way to achieve the American dream," said William H. Frey, a Brookings Institution demographer who analyzed the census data.

Home to the Poor

Over the past decade, the number of poor people living in the suburbs of major metro areas grew 53 percent, compared with 23 percent in cities. Suburbs were also home to roughly one-third of the nation's poor population, outranking cities and rural areas.

The latest census data come amid an overall U.S. growth rate in 2011 of 0.9 percent, the lowest since the mid-1940s, due to fewer births and less immigration following the recent recession.

Fewer people are also moving around within the nation's borders -- just 11.6 percent of the nation's population moved to a new home, the lowest since the government began tracking such information in 1948. That means fewer Americans are migrating to residential hot spots in the suburbs or Sun Belt metro areas such as Las Vegas, Phoenix and Atlanta, upending several of the population trends of the 2000s.

11 PHOTOS
10 Best Cities to Live in Without a Car
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Housing Bust Puts Brakes on Decades of Suburban Sprawl

> Transit coverage: 69.4 percent (36th highest)
> Service frequency (minutes): 8.9 (16th lowest)
> Jobs reachable in 90 minutes: 30.2 percent (43rd highest)
> Walk score: 79.2 (third highest)
> Commuters who bike: 0.7 percent (21st highest)


See homes for sale in Boston.


The Boston-Cambridge-Quincy metropolitan area’s greatest strength for those without an automobile is the prevalence of dense, easily manageable communities. This makes it exceptionally easy for residents to reach amenities such as groceries, restaurants, shopping and schools. The metropolitan area’s primary city, Boston, has the third-highest walk score in the country. The area’s public transit also has a relatively high service frequency rate, making its use that much more convenient for the city’s residents.

> Transit coverage: 96 percent (second highest)
> Service frequency (minutes): 6.2 (second lowest)
> Jobs reachable in 90 minutes: 25.6 percent (69th highest)
> Walk score: 65.9 (14th highest)
> Commuters who bike: 0.87 percent (14th highest)


See homes for sale in Los Angeles.


Los Angeles is the second largest city by population in the United States, and its metropolitan area is fairly spread out. Due to its extensive public transit system the area has avoided a complete automobile-based culture. The metro area’s 19 transit systems have more than 500 bus routes. As a result, 96 percent of neighborhoods are within 0.75 miles to a transit stop -- the second highest rate in the country. Better still, commuters can catch a form of public transportation from their nearest stop every 6.2 minutes.

> Transit coverage: 89 percent (eighth highest)
> Service frequency (minutes): 8.5 (11th lowest)
> Jobs reachable in 90 minutes: 58.9 percent (2nd highest)
> Walk score: 57.6 (29th highest)
> Commuters who bike: 0.78 percent (17th highest)


See homes for sale in Salt Lake City.


Utah’s population is expected to grow from 2010’s approximately 3 million to 4.4 million in 2030. Salt Lake County accounts for more than one-third of the state’s population. To accommodate this growth, the Utah Transit Authority has plans to add four more lines to its light rail system, TRAX, up from its current three lines. This investment is meant to improve transportation for the suburban and exurban population to the city. In the winter, the UTA runs ski transit lines in addition to its rail and bus services.

> Transit coverage: 83.7 percent (12th highest)
> Service frequency (minutes): 8.1 (10th lowest)
> Jobs reachable in 90 minutes: 47.5 percent (10th highest)
> Walk score: 60.4 (23rd highest)
> Commuters who bike: 0.79 percent (16th highest)


See homes for sale in Denver.


Denver has bus service, light rail lines and an airport shuttle service. The city is currently undergoing a multibillion dollar expansion of its transit system, called the FasTracks Expansion. This plan is meant to increase light rail, commuter rail and bus rapid-transit lines. The project, which is expected to be completed in 2019, currently faces a $2 billion shortfall.

> Transit coverage: 95.6 percent (third highest)
> Service frequency (minutes): 6.9 (fifth lowest)
> Jobs reachable in 90 minutes: 58.4 percent (third highest)
> Walk score: 54.5 (34th highest)
> Commuters who bike: 1.56 percent (seventh highest)


See homes for sale in San Jose.


The San Jose-Sunnyvale-Santa Clara metropolitan area’s public transportation is overseen by the Santa Clara Valley Transportation Authority. Like Los Angeles, the area relies heavily on buses, running about 100 routes. Public transit covers 95.6 percent of neighborhoods, the third greatest in the country. Public vehicles also run under seven minutes apart, the fifth smallest frequency. The metro area also has the seventh highest rate of commuters who travel to work by bicycle.

> Transit coverage: 85.3 percent (11th highest)
> Service frequency (minutes): 8.8 (15th lowest)
> Jobs reachable in 90 minutes: 33.4 percent (35th highest)
> Walk score: 73.6 (sixth highest)
> Commuters who bike: 1.07 percent (ninth highest)


See homes for sale in Seattle.


Seattle’s public transportation system not only includes bus and rail transit, but a monorail in the city center, as well as ferries. The city also has the sixth highest walk score in the country, due to its high number of easily accessible amenities. According to Bicycling magazine, Seattle is one of the most bike-friendly cities in the country and “has a 10-year, $240-million bike master plan that seeks to triple the number of journeys made by bike and add 450 miles of bike paths.”

> Transit coverage: 97 percent (the highest)
> Service frequency (minutes): 9 (18th highest)
> Jobs reachable in 90 minutes: 59.8 percent (the highest)
> Walk score: 63 (19th highest)
> Commuters who bike: 0.95 percent (12th highest)


See homes for sale in Honolulu.


Honolulu currently does not have an urban rail system, but its bus system helps cover 97 percent of neighborhoods — the highest rate in the country. Additionally, almost 60 percent of jobs are accessible within 90 minutes to those who live in neighborhoods covered by transit. This is also the highest rate in the country. Nevertheless, the city is planning a $5.5 billion rail project called the Honolulu Rail Transit Project. This will include 20 miles of track, connecting East Kapolei with the Honolulu International Airport and downtown Honolulu and will end at Ala Moana Center.

> Transit coverage: 89.6 percent (seventh highest)
> Service frequency (minutes): 4.5 (the highest)
> Jobs reachable in 90 minutes: 36.6 percent (25th highest)
> Walk score: 85.3 (the highest)
> Commuters who bike: 0.52 percent (32nd highest)


See homes for sale in New York.


New York City and its surroundings rank first in the nation for total number of passenger trips and government spending per capita on public transit, according to U.S. News. It also has the highest rate of service frequency. The Metropolitan Transportation Authority’s 2010 operating budget was $13.4 billion. The average weekday ridership for the city is estimated to be over 8.4 million trips. The city also has the highest walk score on this list, thanks to the ability of city dwellers to reach just about any amenity on foot.

> Transit coverage: 83.5 percent (13th highest)
> Service frequency (minutes): 7.4 (eighth lowest)
> Jobs reachable in 90 minutes: 39.9 percent (16th highest)
> Walk score: 66.3 (13th highest)
> Commuters who bike: 2.23 percent (second highest)


See homes for sale in Portland.


Portland is such a good place for people to live without a car due to both its public transit system and the ease of walking and biking around the city. The metropolitan area is served by TriMet, which in addition to other services offers a Free Rail Zone — a region that includes most of downtown Portland and where light rail and streetcar rides are always free. The city has a number of benefits for bike riders, including designated bike-only areas at traffic signals and free bike lights. It has the second highest rate of commuters who ride bikes to work in the country.

> Transit coverage: 91.7 percent (fifth highest)
> Service frequency (minutes): 8.5 (12th highest)
> Jobs reachable in 90 minutes: 34.8 (30th highest)
> Walk score: 84.9 (second highest)
> Commuters who bike: 1.65 percent (sixth highest)


See homes for sale in San Francisco.


San Francisco is held in high regard for its many successful transit systems, including the San Francisco Municipal Transportation Authority and the Bay Area Rapid Transit district. These systems cover nearly 92 percent of neighborhoods -- the fifth highest rate in the country. San Francisco also has the second highest walk score and is excellent for bicyclists. Commuter rails within the city allow bicyclists to mount with their bicycles, and there is a bike shuttle across the Bay Bridge to help cyclists during rush hour.

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Metro areas showing renewed growth or slower losses last year included Los Angeles, Miami, Seattle and Detroit, where steep population drops in the downturn have largely bottomed out.

Other findings:

• Rural counties just beyond the edge of metropolitan areas saw growth drop sharply last year, hurt by the slowing of outward sprawl. From 2010-2011, these counties increased by 30,000 people on average, compared with annual growth of 174,000 in the 2000-2010 period, according to Kenneth Johnson, sociology professor at the University of New Hampshire.

As a whole, non-metropolitan areas last year grew 0.1 percent, compared with 0.9 percent for large metro areas and 0.6 percent for small metropolitan areas.

• Charlton, Ga., led the nation last year as the fastest-growing county, followed by St. Bernard Parish, La., both increasing more than 10 percent. That is in contrast to the 2010 census, when St. Bernard Parish ranked last in percentage growth, due primarily to the effects of Hurricane Katrina.

• Texas had four of the nation's fastest-growing large metropolitan areas: Austin, San Antonio, Dallas-Fort Worth and Houston.

• Los Angeles was the most populous county, with 9.9 million residents.

The census estimates used local records of births and deaths, Internal Revenue Service records of people moving within the United States and census statistics on immigrants. The estimates were for both counties and metropolitan areas, which include cities and surrounding suburbs.

Copyright 2012 The Associated Press. The information contained in the AP news report may not be published, broadcast, rewritten or otherwise distributed without the prior written authority of The Associated Press. Active hyperlinks have been inserted by AOL.
Copyright 2012 The Associated Press. The information contained in the AP news report may not be published, broadcast, rewritten or otherwise distributed without the prior written authority of The Associated Press. Active hyperlinks have been inserted by AOL.

See also:
First-Time Homebuyer's Guide

How to Shop for Your First Home

How to Price a Home to Sell Fast




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