Time was when the American Dream included a house, a family with a couple of kids, a dog and a vehicle to schlep everyone around to soccer games, PTA meetings, the grocery store and church.
For some, the past decade has found folks with the “house” part harder to come by, forcing many to look at renting as an option rather than buying.
Here in Naperville, Linda LaCloche, communications manager for the city, said for the past several years “there have definitely been more building permits pulled for multi-family than single-family homes.”
“Of course a few years ago, the home-building market came to a standstill because of the recession, but this multi-family development is a trend we’ve been seeing for the past two to three years,” she said.
Average home listing prices in Naperville are currently topping half a million dollars, making the necessary downpayment for some hard to reach. A decade or more ago, interest rates made home buying more difficult, but today, it’s all about the job market and the lack of security folks are experiencing that makes owning their own home less likely or even enticing, real estate professionals said.
“There is definitely more action in the rental market, and we’ve seen it here in Naperville at The Arbors where I own 281 units,” said Barbara Gaffen, CEO for Prime Property Investors, Ltd. “We’ve retained people because of the amenities here and the conveniences. People today are renting longer given the job market and possible transfers. A two-year hold on a house isn’t profitable and doesn’t make sense.”
Russ Petry and his wife have been renting for eight years at The Arbors of Brookdale in Naperville and have no plans to buy a home again. Former home owners who moved here from Chattanooga, Tenn., Russ and his wife were forced to sell their home when he was let go by AT&T.
“The bank holding my mortgage wasn’t very sympathetic when I lost my job, and I said ‘the heck with it’ and I sold the house,” Petry said.
Petry and his wife could buy again if they wanted, but they are just not looking to tackle all of the maintenance, upkeep and taxes that come along with home ownership at this time.
“I’m a Vietnam vet and would get government assistance with a loan, but we’re enjoying the lifestyle we have now and are too busy to keep up with a house,” Petry said. “When we moved here from Tennessee, people there had heard of Naperville and wondered if we were rich. I went from paying $300 a year in property taxes to over $8,000 the first year we lived here. I’m still in culture shock over that.”
The Petry couple prefers the low maintenance lifestyle, but younger couples often tell a different story.
Mariel Mellor and her husband Jeffrey live at the Bristol Station apartments in Naperville with their 2½-year-old son. Mariel said the couple’s “ability to buy a home has more to do with the uncertainty of the times” than money.
“We currently have access to the train and the conveniences of living here and it makes more sense to stay where we are than buy a home,” Mariel said. “The housing market, I feel, is getting slightly better, but it’s still unstable. I don’t want to buy something and risk losing any value. Right now, we have no exit strategy, although we might get a house in a few years when our son is ready to go to school, but right now, we’re not moving.”
Kate Sulaski, a 24-year-old who lives at The Arbors of Brookdale, said the “fear of getting laid off” as well as the volatile job market have made folks in her age group adjust their plans.
“It’s nice to have a maintenance free place like this with all the amenities, but people like me have to be able to shift gears and make changes quickly,” Sulaski said. “For us, things have morphed in another direction.”
Realtors also say people today seem to be looking more at townhome, apartment, or condo living as options. Jack Persin, a managing broker for Ryan Realtors here in Naperville, argues that the paradigm for living arrangements has changed and that people today “are redefining the ‘American Dream’” due to the economy and the aftermath following the recent recession.
“The rental market really started to change its complexion beginning in 2008 as the number of foreclosures began to rise,” Persin said. “At the time, we had only 40 to 50 rental properties and the number just exploded. Today, the numbers have fallen off a bit, but there is still a strong market because of short sales, people with dinged credit, and the overall rental market.”
Persin said the current rental occupancy rate in Naperville “is about 92 to 96 percent,” an indicator that there is still “a lot of interest in the rental market.”
“When that number falls below 90 percent, that’s when the market starts to get a little softer,” he said. “Our company is currently managing about 2,500 units in our geographical area. The main thing that is keeping people from buying homes is the job market, and with the average home prices today in Naperville, there is a gap regarding what people can afford.”
Persin is quick to note, however, that options like attached dwellings provide opportunities for people to still own their own piece of the pie.
“We have some beautiful townhomes that cost around $100,000 and are nice properties,” he said. “The ‘American Dream’ of the 3,000-square foot home might not exist, but there are other options.”