NORTH OLMSTED, OH--(Marketwired - Nov 20, 2013) - These days, you don't need a big house to live large. Instead of spacious floor plans in subdivisions or planned communities, many of today's homeowners are drawn to life in urban centers. From empty nesters, to young professionals and single men and women, metropolitan living is drawing more residents... and they're not just renting. These consumers are forfeiting square footage for style and efficiency, purchasing smaller space homes in urban environments that make the finer things in life more affordable and accessible, all while being close to work and a vibrant lifestyle.
For the first time in more than nine decades, the major cities of the nation's largest metropolitan areas grew faster that their combined suburbs1. This trend, identified by Moen's department of consumer and market insights in the second article in the Moen Watch three-article series, demonstrates a shift in home ownership from suburban to metro areas or as Moen calls it: "Urban Uprising."
"This idea of Urban Uprising is one we've continued to watch and it's especially interesting because it goes against what we've thought was true for years -- that bigger is better," explains Jack Suvak, senior director of consumer and market insights, Moen. "In 2012, we started to see this trend gain momentum with urban population and downtown occupancy increasing. But now, migration toward city centers is accelerating, and smaller space living provides great convenience and appeal to today's consumer."
Urban Uprising: What Is It?
From Milwaukee to Cincinnati, downtown residential population is on the rise -- up 26 and 12 percent, respectively2. Homeowners are demanding urban properties, and home builders are listening. Toll Brothers currently has "City Living" projects underway in half a dozen metro markets, with their latest building in Manhattan selling out in just four months3. Lennar Corp. is also heavily investing in downtown living, spending $1 billion on urban, multi-family properties across the U.S4.
"There are a number of reasons urban living is so appealing," says Suvak. "By living in a metropolitan setting, consumers have greater access to amenities and resources, not to mention a reduced commute to work and the ability to walk or use public transportation to easily reach their destination."
Beyond convenience and accessibility, living in metropolitan areas is also a smart investment. Urban housing values are increasing faster than suburban homes, according to data from economist Jed Kolko at Trulia and Cities. Housing prices (based on the median asking price per square foot) were up 11.3 percent in urban neighborhoods, versus 10.2 percent in suburban neighborhoods. And according to John Mcllwain at the Urban Land Institute, home prices in urban areas did not fall as hard as those in the suburbs... and are recovering far faster.
Who Are the Urbanites?
It's clear why consumers are migrating inward to city centers, but who are these urbanites? Today's metro dwellers consist of individuals across generations that desire a location with walkability, proximity and easy access to public transportation. Three of the largest segments living in urban environments include:
Urban Nesters (ages 49-67): Empty nest Boomers are taking to downtown life. These Boomers like active, social lifestyles that downtowns offer. These locations provide a social return to the past for this generation -- there is activity, life and people on the street.
Upscale Gen Y'rs (ages 18-35): Upscale Gen Y'rs want to live in areas that are close to where they work and play. Urban cores provide exactly the right blend for these individuals to maximize their time doing activities they have to do, with those they want to do, as well.
Single Gen X'rs (ages 36-48): More and more consumers are choosing to be single. City benefits provide a big attraction for these single dwellers. Living alone in cities can be intensely social and lead to a collective experience by creating an "urban tribe" 5 -- a support system consisting of friends and family members living in close proximity.
Life in an Urban Environment: How is it Different?
Urbanites aren't concerned with the small size of their house; rather they're focused on creating a larger-life experience. Since the home footprint is smaller, increased functionality and style is extremely important when furnishing this urban space.
"Urban living demands more effective use of the limited dwelling space available -- tight quarters demand ingenuity and compromise," adds Suvak. "This becomes a top priority of urbanites as they seek efficiency and look to maximize the functionality and flexibility of their spaces."
Smaller space living has created a rise in demand for products and furniture that are both multi-purpose and multi-functional. According to Moen research6, homeowners would choose a smaller home with higher-quality products and amenities (63%) over a larger house with fewer amenities (37%). So how are they doing this?
Nested Functionality. In order to make the most of these smaller living spaces, urban homeowners are looking for products with nested functionality. For dual-purpose living and sleeping areas, urbanites are turning to a solution that used to be considered simply a prop on old TV and movie sets -- the Murphy bed. With a number of smaller apartments and homes combining these spaces, this solution keeps the sleeping area hidden when not in use in a chic and functional way. "Stylish storage, like shelves with hidden compartments, a hollow bench with extra space or even ottomans designed to hide shoes are important to keeping these smaller homes both organized and functional," says Suvak. "There are a number of ways today's urban homeowner can find furnishings with nested functionality to make every inch of space work harder and better."
Downsize and Up-Spend. Newly built small home prices are ranging from $120 - $195 per square foot7, whereas a traditional (larger) home ranged from $105 - $128 per square foot 8 in 2012. And since urban housing values are rising more quickly than their suburban counterparts, it suggests homeowners might be looking for higher-end amenities and fixtures than homes with larger square footage. "Creating a completely coordinated look with upscale products is a surefire way to protect a home's value, especially in the kitchen or bathroom," adds Suvak. "Utilizing a matching suite in both, like the modern 90°™ kitchen and bath collection from Moen, creates a visually pleasing aesthetic throughout a small home, where multiple rooms or living spaces are visible from a single spot."
Spatial Convenience. Beyond the convenience to work, culture and public transportation outside of the home, urban living also provides spatial convenience inside, as well. The nature of small space living puts interiors into greater proximity, and places more premium on efficient use of space.
"Urban Uprising provides a level of convenience and connectedness for which consumers are longing," concluded Suvak. "Many homeowners aren't dreaming of living in McMansions in suburbia anymore. Now, the perfect (smaller) spaces are available in metropolitan areas across the nation, making it easier for everyone to find the home that's perfect for them."
For more information about consumer behavior trends from Moen, visit moen.com.
As the #1 faucet brand in North America, Moen offers a diverse selection of thoughtfully designed kitchen and bath faucets, showerheads, accessories, bath safety products and kitchen sinks for residential applications -- each delivering the best possible combination of meaningful innovation, useful features, on-trend styling and lasting value. In addition, Moen® Commercial offers superior performing products that deliver lower lifetime costs for today's facilities.
Moen has worked diligently to support, promote and advance sustainability within the organization and the plumbing industry. The company has been recognized with the 2011 EPA WaterSense® Excellence Award, as well as the 2010 EPA WaterSense Manufacturer Partner of the Year Award, for its work to protect the future of our nation's water supply through the introduction and ongoing support of water-efficient products, programs and practices, while keeping consumers' needs top-of-mind.
Moen is part of Fortune Brands Home & Security, Inc. (NYSE: FBHS), which creates products and services that help fulfill the dreams of homeowners and help people feel more secure. The company is a leader in the home and security industries and features well-known and trusted brands like Moen® faucets, Master Lock® padlocks and security products, MasterBrand Cabinets®, Therma-Tru® entryway systems and Simonton Windows®. For more information, please visit www.fbhs.com.
WaterSense is a registered trademark of U.S. Environmental Protection Agency (EPA).
1 William Frey, Brookings Institution Demographer
3 Professional Builder, December 2012
4 Miami Herald and Business Journal
5 CNN - "Solo Nation American Consumers Stay Single"
6 "What Home Buyers Really Want," National Association of Home Builders
7 Apartment Therapy
8 Moen Consumer & Research department calculation