How Do Americans Choose Their Homes?

Updated: Jan 29



I grew up in China and have lived in Canada and the United States. The houses and home ownership in Canada and America are almost same. However, houses and home ownership in China are totally different from in America and Canada. People who live in China and come to America to buy properties need to understand the American housing market and what home ownership means in America. In China 20 years ago, everyone was living in apartments built by the manufacturers that employed them. They did not pay rent and had no choice on where to live. The government manufacturers owned all the apartments. Later China reformed its housing market and people could buy apartments and own the right to use their apartments for a certain period of years. Most of the homes in China are apartments. However, America has a totally different home market and totally different rights of ownership. What do Americans consider when they buy homes? Here are some factors that influence how people in America chose where to locate their homes.


First: the quality of the neighborhood. When Americans buy homes, first they consider the safety of the neighborhood. They will research and find out if the crime rate is higher or lower in the neighborhood. Under their professional ethics, realtors should not steer the buyers to or away from certain neighborhoods. However, Americans consider safety to be a critical factor in choosing a neighborhood. In comparing two neighborhoods, a house in a neighborhood that is very safe and stable is worth more than the same house in a neighborhood that has a high crime rate. Besides safety, neighborhood quality is also affected by amenities, such as exercise facilities, playgrounds, parks, and schools. Schools are especially important to parents with school aged children. Parents want their children to go to the best schools possible. When they buy or rent a house, they consider the school ratings first.


Second: Convenience to jobs. Many people want to buy homes that are close to where they work. They do not want to spend a long time on the road to driving to and from work every day. During the 70’s, a lot of manufacturers and businesses located their companies in suburban areas. The housing markets surrounding these major employment centers thrived. Nowadays, when Americans buy homes, they still consider how close the home is to their work. Over the past few decades, most American manufacturing jobs were relocated overseas. Nowadays the areas of finance, technologies, healthcare, and service industries are dominating in American jobs. Most offices and corporations locate their offices in the downtown areas. The price of houses in the city areas have increased dramatically because people want their homes close to their work. Some developers choose the areas close to downtown to remodel and develop their properties because these areas are in high demand in the housing market.

Third: Affordability. Affordability is always an especially important factor when people choose their homes. A 1200 Sqft condominium downtown will sell for the same price as a 2000 Sqft single family home in the suburban area. In 80’s, you could buy a 3 bedroom and 2 bath 1600 Sqft single family home in a decent neighborhood for $90,000. Now that same house may cost $400,000. If you do not have a substantial and consistent income, you will have hard time owning a home. Job opportunities and home ownership have a remarkably close relationship. Increases in overall employment will automatically increase the opportunities for home ownership. If you have a decent job and decent income, you will be more comfortable whether you choose to own or rent your home.


Fourth: A location that is nearby family and friends. Some people choose their homes so that they can be close to their family and friends. Some people have aged parents. They buy homes close to their parents so that they can take care of their parents. Some grandparents choose to buy homes to be close their grandchildren. Family and friends are critical to the quality of our life. Some neighborhoods have a mix of homes in different price and size ranges to provide more flexibility and a more diverse group of residents. For example, my neighborhood has 5000 Sqft homes with prices around $2 million, 1600 Sqft homes with prices around $400,000, and a mix of different types of condominiums and apartments. It perfectly meets different people’s housing needs and budgets. The mixed neighborhood has become more popular now because it can satisfy different housing needs. Single family homes, townhomes, condominiums, and apartments are all located in a single neighborhood to meet the needs of all generations, budgets and lifestyles.


Fifth, Close to shopping. People not only choose their home to be close to their work, they also choose their home to be close to shopping. The communities with conveniently located grocery stores, pharmacies, retail shopping, healthcare centers, restaurants and entertainment facilities satisfy the desire for neighborhood-based activities and shopping. Do you want to drive one hour to go shopping or do you want to just go to a shopping center that is within 10 minutes of your home? Most people will choose the mall that is within 10 minutes driving distance. Generally, commercial real estate developers consider the surrounding population and income level when they choose the location of their retail or shopping center developments. I think improving the community quality and satisfying the community needs should be high on the commercial real estate agenda as well.


Where do Americans choose to locate their homes? Different people have different needs. Politicians and government systems can dramatically influence the housing market and the percentage of people who own or rent their homes. We see the difference between the Chinese housing market and home ownership and the American housing market and home ownership. Nowadays the important factors for Americans in choosing their homes are the quality of the neighborhood, convenience to their workplaces, affordability, closeness to their family and friends, and convenient access to shopping, restaurants, and entertainment. Builders, commercial real estate developers, and realtors should focus on improving the quality of the neighborhoods, creating more job opportunities, building more affordable houses, and satisfying diverse group needs. Improving the quality of the neighborhoods and enhancing the lives and satisfying the needs of our diverse community should be our primary obligations and goals.

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