This is the third post of three posts from Rick Tobin, where he discusses the evolution of the suburbs in America and how they were shaped and continuously molded by the economic, political, cultural and technological changes in the world.
Suburbia’s Evolution: The 1990s
The decade of the 1990s began shortly after the end of the Cold War with the Soviets. East and West Germany were also reunited again. The fall of Communism throughout much of the world helped unite the world even more.
On August 2, 1990, Saddam Hussein invaded the neighboring country of Kuwait. The Persian Gulf War began a few months later on January 17th,1991. The U.S. forced the withdrawal of Iraqi troops in Kuwait by the next month. The ground war portion of this war lasted 100 hours until the Iraqis conceded defeat.
The U.S. fertility rate increased slightly in the 1990s to an average of just over two children per household. The percent of married women in the workforce surpassed 60% by the end of this decade, and approximately 50% of America lived in some form of a suburban area (almost 150 million Americans).
Suburbia’s Evolution: The 21st Century
We are now in the middle of the second decade of the 21st Century. The evolution of the American way of life in suburbia has grown in popularity around the world. In addition to the growth of suburban communities here and abroad, the “franchization” of predominantly American-owned businesses has increased worldwide. There are many communities in Japan, China, Western Europe, and other regions around the world which are being modeled after successful suburban areas like Irvine and Laguna Niguel in California, Phoenix, Las Vegas, Dallas, Atlanta, and Florida. In addition to these suburban neighborhoods, the same franchised fast food restaurants, fancy coffee shops, grocery stores, discount warehouse centers, and other franchised businesses are being built right next to these new suburban neighborhoods. The American lifestyle is admired by many people around the world for many reasons. First, the freedom that we have here is not readily available to many people abroad. The food, beverage, clothing, and automobiles are desired by many who eagerly watch American films and want to live the same American lifestyle by purchasing our products. The demand for American products is staggering. There are several fast food businesses that generate more income from foreign based restaurants than from local American locations. Following the trend of foreigners wishing to live the American lifestyle, suburban communities are developing abroad as well.
The flip side of the expansion of our popular American lifestyle is that the demand for oil and other natural resources has increased substantially the past decade. Countries like India and China, with their respective 1 billion plus population bases, have increased their demand for energy and natural resources. This is partly why oil has increased to the $90 to $100 + per barrel price range in recent years.
The exporting of the American lifestyle around the world has both positive and negative effects potentially for all of us. Increased demand for American products may generate more jobs here, and the market value of American companies may increase as well.
The evolution of the telecommunications and computer industries has connected the world more than ever before. The internet has allowed more free speech and the voicing of different opinions from countries that had rarely experienced this type of free speech. The evolution of the internet will topple even more dictatorships and Communist regimes around the world as citizens will be empowered with more knowledge than ever before.
Ironically, many Americans have spent more time in their homes than in years past. The efficiency of phones (home and cellular), email, and the internet have allowed more Americans to avoid spending minutes or hours on the freeways when they were commuting to and from work. Additionally, a higher percentage of mortgage and real estate professionals are able to work out of their homes as opposed to a central place of business with their various high tech gadgets such as computers, iPhones, iPads, cell phones, and other products.
The futurist, Faith Popcorn, once coined the term “cocooning” to describe the increased time that people spend in their homes. Our homes are becoming the center of our universe in a way. With numerous phone, fax, and internet lines, we can reach out across the world either through our respective business or investment ventures.
As a result of the importance of our homes, the demand for the perfect home may bode well for future home values. There may be a number of very remote regions which may be the next popular place to live in the near or long term. Rural parts of Montana, Idaho, and other regions may be the next real estate “hot spot” as the desire for an improved quality of life replaces the need to commute to work every day in a busy city.
There will probably be a number of foreign countries that more Americans move to as well (i.e. Baja California in Mexico, Western Canada, Costa Rica, New Zealand, Australia, etc.). Americans may find that they can live a similar lifestyle, have many of the same comforts of home, and the same information access in other locations around the world at a much lower price.
There are many economists who used the term “globalization” when describing what is happening around the world. I think the term more closely represents the “Americanization” of the world. We are exporting our lifestyle abroad much more than we are importing other regions’ lifestyles. We are also experiencing an enormous growth of immigrants looking to become American citizens. The growth of America originated with immigrants who rode the ships into Ellis Island, New York (and other locations). Our country will continue to grow with the net increase of new immigrants.
America’s population now is over 300 million people. There is a lot of undeveloped land around our country. We may eventually have a population base of between 500 million and 1 billion plus like in India and China. Hopefully for all of us, there may be enough real estate and flexible and affordable financing to go around down the road. As long as the demand for American products and the hope for our American lifestyles remain steady, then our economy may continue to grow and prosper in the future.
With the recent developments of 3D Printer systems which supposedly may soon be able to build homes within just one day, what sort of an impact with their really high tech gadgets have on home prices, future development locations, and to individuals who derive their income from the construction and development industries. How will mortgage professionals also be impacted if loans may be processed in seconds or minutes online as underwriting systems continue to get more automated?
With more new development occurring in and around larger U.S. cities in recent years, then how will the mass migration back to the cities impact housing values out in “Suburbia”? Will a higher percentage of immigrants to the USA offset any potential suburban and / or metropolitan city population losses? Only time will tell.
Or, will cities get so crowded that the migration trends revert back to Suburbia? We shall see how the migration and investment trends work themselves out as we progress more into the 21st Century.
Author: Rick Tobin
Rick Tobin has a diversified background in both the Real Estate and Securities fields for the past 25+ years. He has held seven (7) different Real Estate and Securities brokerage licenses to date.
Rick has an extensive background in the financing of residential and commercial properties around the U.S with debt, equity, and mezzanine money. His funding sources have included banks, life insurance companies, REITs (Real Estate Investment Trusts), Equity Funds, and foreign money sources.
You can visit Rick Tobin at RealLoans.com.