When Lynn Steinke and fiance Christopher Otterson bought their new home in Round Lake recently, they viewed the house not as a stepping-stone but as an anchor.
With a 3,050-square foot, four-bedroom, 2 1/2-bath abode to expand into, the couple plans on living in the home for a very long time.
“If not forever, then at least for 40 years,” said Steinke, 24, of her future plans. “I don’t envision myself ever having to move. I work close, and it’s a nice area. It has a good school system.”
Among first-time buyers, though, Steinke and Otterson may be something of a curiosity. Housing experts say for many first-time buyers, planting roots is not high on the list of priorities. Especially when the grass on the other side of the fence always looks greener. “The first-time buyer sees his house as a temporary move, until it’s appropriate to go to the next one,” said Steve Hovany, president of Schaumburg-based Strategy Planning Associates, a real estate economics and planning firm. “The younger they are, the more often they move.”
Overall, Hovany said, people move every five years. But for younger buyers, it may be about four years or less.
“The young buyers we see are basically in it for the short term,” said Jim Madden, vice-president of Gateway Centre Enterprises, which is creating two four-story, 39-unit condominium buildings along with retail stores and a restaurant in suburban West Chicago.
“They’re looking at it as a stepping stone. They’re very cognizant of appreciation, [and] what will be built in the area. They’re planning on taking the appreciation and going on to bigger and better things.”
Among townhouse buyers there is a tendency to think in longer terms, he added. At a townhouse community his company built in Algonquin, he said, buyers were more likely to concern themselves with school systems, shopping and family-oriented amenities of the community. Even so, Madden said, few buyers were planning to stay beyond 10 years.
In earlier generations, Hovany noted, it took much more time in the labor force to scrape together dollars for a down payment. And it wasn’t until the 1970s that a man applying for a mortgage was allowed to use his spouse’s income to qualify. As a result, folks were considerably older when they bought their first homes, and they bought fewer houses over their lifetimes.
Today, just about anyone with a good, steady job in the Chicago area can get a mortgage.
At Wineberry, a townhouse development in DeKalb, sales manager Mark Longo reports most buyers are looking to leave in a few years, but some are intent on staying indefinitely. Among the latter are single professionals and young families, who view remaining in their homes in a fast-growing area as an investment in the future.
“There’s a lot of land being filled with developments now, it’s appreciating quickly, and they have the opportunity to get in on the ground floor of a developing area,” Longo explained.
Bill Gill, Downers Grove-based regional manager with Baird & Warner Real Estate, believes 80 percent of single-family home buyers plan to use their first purchases as steppingstones to larger houses.
He said they plan to stay just three to five years. In fact, most will stay much longer, and a smaller percentage will stay for decades, Gill said.
A combination of factors come together to influence the decision to stay.
“You meet neighbors,” Gill said. “A lot of times you start having children, and the children go to the schools, make friends in the neighborhood . . . With children come increased costs, so affordability becomes an issue . . . It becomes less important to have the big dream house, and other things start coming into your life.”
Of those who do stay longer than expected, Gill believes 90 percent to 95 percent will eventually undertake substantial home improvements. They will finish the basement or attic, remodel the kitchen, reconfigure the floor plan or build an addition onto the home.
“They say, `since we’re going to be here for a while, let’s do something significant,’ ” he said.
Fifty years, ago, Gill said, many buyers stayed put, despite the average new-construction home of the era measuring just 900 square feet.
Today, buyers are much more upwardly mobile, despite having far more space in their first homes. In 2003, the average new construction home encompassed 2,400 square feet, he said.
Home buyer Steinke said the secret of staying in one place for a long time is smart planning. She and Otterson bought at Madrona Village in Round Lake, developed by Concord Homes.
“If you pick a good location with good schools and a place where your property value is only going to go up, there’s no reason to move,” Steinke said. “I know now I don’t want more than two children. And this house fits my needs for those plans.”
Andy Kammes, manager of Baird & Warner’s Glen Ellyn office, said an adjustable rate mortgage makes sense for those with a short time horizon.
“If they’re there for three years or five years or less, it might be wise to take an adjustable rate mortgage, because those rates could be lower than the 30-year fixed-rate mortgage,” Kammes said.
Gill believes buyers who move frequently can obtain “great, great deals” on adjustable rate mortgages.
“If there’s a big spread, and your situation is such that you know you’re going to move, by all means take advantage of adjustable rate loans,” he advised.
