The END of the Suburbs?

[Shane Pearlman]

With an eye to the future, should we really be buying in remote suburbs, or is that like investing in VHS rental shop in a digital age? I’m seeing what looks like a massive urbanization trend.

I am a buy and holder. Other people put their end of year profits and personal savings into 401k plans. My wife and I buy properties for the future. Putting aside the (highly important) factor of micro-environments for the purpose of this thread, we have been talking a lot about trends. Julie & I learned in 2008 the impact of macro trends. Before that we only thought locally, but seeing the how monetary policy shaped real estate and affected our personal bottom line the way it did, I'm raising my vision to keep an eye on larger forces. If and when the interest rates finally rise and inflation hits to correct market tampering, we'll find ourselves in a very different economic and real estate environment. I’m locking in as many long term low interest loans as I can. 

In the same way that I see a tidal wave of inflation, Julie and I have been watching a steady flow of wealthy people migrating to city cores. In the past 50+ years our poor lived in inner city ghettos and the wealthy escaped to their suburban McMansions. But we are personally experiencing an inversion. We invest in Seattle and I've watched neighborhoods go from hooker to hipster. In the bay area, where we live now, San Francisco rents and prices exploded, which overflowed into an Oakland renaissance. Where do the poor go? Further out to where they now can afford to live. It makes me wonder if the suburbs might just end up our new ghettos. I don't see large companies moving their HQs to suburbs as they did in the past, but rather closing their branches to centralize in major metros. Where the jobs go, people follow.

For the long term investor, where should we park our chips?

[Joel Owens]

I guess it can be area dependent.

Here where I am the suburbs are alive and well. In fact growth is incredible and the areas keep getting better and better. Some people do not want to live in urban core......... : )

I like my privacy and peace and not feeling like I am in a footprint squished in like a sardine to fit. Some people enjoy the extreme hustle and bustle. I love serenity. If anything we have more crime here in the downtown cities close to Atlanta. That element couldn't afford in masses to live in the burbs here in nice areas. 

Maybe Cali is shifting like you say but I do not see a whole country phenomenon happening with that.