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Urban planners predict buyers will flock to cities with a small-town feel where you can walk to work and shopping
Saratoga Springs is anti-suburbia. In this town of 28,500 that's part of the Albany area, boutique shops, not chain stores, dominate downtown. Natural spring water flows from the public fountains. Some residents walk to work. "Architects and planners got together with local politicians to make sure we stayed vibrant to compete" with other communities, says Daniel Neary, a local architect.
Just as the boom years bred car-centric subdivisions and strip malls, the bust may lead buyers to cities and towns centered on a commercial, retail, and residential hub. That should be a boon to places like Saratoga Springs and Kentlands, an enclave of Gaithersburg, Md., that typify this "new urbanism" model. What makes a city livable, says urban planning and policy expert Robert E. Lang, is "the ability to walk and not drive to go pick up the basics in your life." James Kunstler, the anti-sprawl prophet and author of The Geography of Nowhere, lives in Saratoga Springs.
Prices in those communities will get a boost as buyers eschew the exurbs in more rural locales in favor of urban centers. The U.N. predicts rural environs in the U.S. will shrink by almost 2 million people between 2010 and 2015. In the face of the bust, home values in the Saratoga Springs area have held up well, falling just 1% in 2008; and prices should continue to rise steadily as the area attracts families like the Longs. Kristen Long, 40, and her husband, Jeff, 38, traded a seven-acre horse farm near Rochester, N.Y., for a $300,000 custom-built three-bedroom home near Saratoga Springs. "We are so close to great shopping and restaurants," says Kristen. "It's quaint, and you feel comfortable and safe."
When gas was cheap, the remote suburbs of Chicago, Scottsdale, and Las Vegas made more financial sense. Homes in those areas sold for a fraction of their city equivalents. And suburbanites readily drove 20 minutes to a supermarket or commuted 90 minutes to work. Then gas prices surged and the economy soured, crimping housing demand in exurbs. Even though gas prices have since fallen, those markets likely won't see boom-level prices for many years. In Kane County, Ill., empty McMansions sit beside soybeans fields. Local corn and soybean farmer Steve Pitstick says housing contractors are offering to help plant his crops and do other odd jobs. He hasn't had much work for them. "The economy imploded, and everything stopped," he says.
Manhattan transplant Jeffrey Cannizzo moved to Saratoga Springs, home of the eponymous race track and Skidmore College, for a change of pace. Cannizzo, a former manager at Microsoft who now heads a horse-racing trade group, wanted a small-town feel. After renting for a while, the 30-year-old started looking to buy in February. He recently bid $302,000 for a four-bedroom colonial two miles from his office, and the offer was accepted. Cannizzo likes the town's neighborliness: "People here are involved far more than in other communities I've been around."
Saratoga Springs, N.Y.
Urban planners predict a flight to cities with a small-town feel where you can walk to work and to shops
2007 MEDIAN HOME PRICE
2008 MEDIAN HOME PRICE
Numbers reflect metropolitan area; Data: Fiserv