Daybreak's New Community

The South Jordan City Council has just approved an addition to a plan submitted by Kennecott Land to build an “Active Adult Community” here in Daybreak. The Daybreak Active Adult Community will have marketing that will target the 50 years and older demographic group, but will not be totally exclusive to that age group. I expect we will start to see the “Daybreakish” advertising for this community sometime this year. An advertisement featuring a husband and wife with gray hair riding bikes around the lake possibly with an “empty nester” caption displayed somewhere prominently.

In my opinion this part of the development will fuel growth and compliment the existing Daybreak community. The plan is for the Daybreak Active Adult Community to be located West of Oquirrh Lake and North of the new Rio Tinto Corporate Center. It will be nice to see some houses on that side of the lake as for years it has just been mounds of earth and construction equipment. The homes seem to be of the parkside variety that Holmes Homes and Richmond American Homes are building in Eastlake. This is logical considering that the targeted group will probably like not having to take care of a yard.

Considering the principles of New Urbanism this new development will bring further age diversity to a community that some consider to be "plagued with children." The current real estate market has been hindered by the tightening of credit standards and lack of affordability in the Salt Lake Valley. However, this particular demographic is most likely not constrained by these factors. This demographic has probably been living in a McMansion in which they have a considerable amount of equity if they do not own it completely. They are tired of having a 4500 sq ft house to take care of along with the burden of high utility costs. They want a simpler life in a community that has plenty of amenities. This trend has been proven and documented in numerous publications both journalistic and academic.

The size of this group is also astonishing. Developing this part of Daybreak now will probably keep Daybreak sales up and will increase their market share in a time when many developers are struggling to stay solvent. I think one of the best benefits of this move will be the generational diversity mix here in Daybreak. Many neighborhoods are built and then populated by people of the same age, socioeconomic status, and stage in life. These neighborhoods are stable for awhile until this demographic experiences a change. Maybe all of the kids have grown and moved on to college or other pursuits. All of a sudden the neighborhood that was once full of kids seems empty. Maybe all of the residents get to the point where they can buy a better house and the permanent nature of a residential neighborhood all of a sudden turns into one in which half of the homes are now rentals. Within a couple of years you see the landscaping and general upkeep of the neighborhood deteriorate.

This type of thing can be prevented if the neighborhood contains a good mix of residents. Many might say that designating a specific area of Daybreak just for the "old fogies" is actually segregating them. I would have to agree with this point of view to a certain extent. However, unlike many active adult communities, this new development looks like it will be integrated with everything else in Daybreak. It will be without walls and fences to keep the young "whipper snappers" out. Overall, mixing generations in a neighborhood is a good thing. This Active Adult Community is a big step in that direction.

University Healthcare at Daybreak

Kennecott Land released a statement today about a new medical care facility that will be built right here in Daybreak. While this facility is not as massive as the hospitals located near the University of Utah or in Murray, the statement indicates that the facility will only be the first phase of a medical “campus” to be built in the coming years as Daybreak is built to completion.

This first phase will feature a 150,000 square ft. building that will be situated on about 10 to 15 acres. To get a perspective of the size of this first facility, the Rio Tinto Corporate Center that presently stands next to Oquirrh Lake is 175,000 square ft. So it will be a little smaller, but not much. Within this space the University plans to incorporate primary and specialty care along with radiology. They will also have a pharmacy and vision care center there as well. Not a bad start to what will be a regional medical center.

Future plans include an expansion of the campus that will take up to 50 acres to be situated near TRAX and the Mountain View Corridor. This future medical campus will include a full-service hospital, surgery and imaging center and an AIRMED base. From my perspective this facility and future campus will be a major boost to Kennecott Land’s Daybreak plans. Having quality medical care nearby is an attractive proposition to the massive demographic wave of baby boomers. These are people who will need medical care close at hand and will move to a neighborhood like Daybreak to be near it. Hundreds of workers will be employed and will be spending their lunch breaks at nearby cafes and might decide that it would be nice to be able to walk to work. While many of the workers will be support staff, other employees will include doctors, nurses, technicians and managers. Professionals that will seek a nice neighborhood nearby to live in.

All of these benefits along with the impact it will have on the local economy and tax base has convinced me that this move is a true stroke of genius by Kennecott Land. However, as I have mentioned in earlier posts, this medical facility will need to be integrated into the community seamlessly. This can be accomplished with good planning and design of which Kennecott Land has certainly demonstrated so far with Daybreak. Hopefully this trend will continue. However, I can’t help but notice a peculiar yet increasingly common sequence of events in this case. First Kennecott donates a mass of money to support the new Utah Museum of Natural History at the University of Utah and now the University plans its new regional care facility to be in Daybreak. Of course we have seen this with many other capital projects in which Rio Tinto has an interest. You scratch my back and I will scratch yours.

Are Houses in Utah Getting Smaller?

Are Utah Homes Shrinking? Since the beginning of suburbia after WWII homes across the country have been getting larger. The average home back then was about 1100 square feet. In the 1970s this size grew to 1600 square feet. Presently the average American home is 2300 square feet. This may still sound fairly small, but the calculations for this figure do not include basements, bonus rooms, or garages. Now this trend is reversing itself. According to recent reports the average size of the American home is beginning to shrink. This downsizing is attributed to rising fuel costs, the “green” movement, and an aging population.

The leading edge of the baby boomer population just turned 62. This demographic is getting ready for retirement and the majority are becoming empty nesters. Since they do not have kids and want to stretch their retirement dollar, buying a smaller home in a nice community is becoming a priority. One of the new features in the new North Shore Village will be residential construction targeted specifically at the aging baby boomer population. While Kennecott had this in mind earlier it did not make it off of the drawing board into Eastlake Village. Now that lending standards have been tightened and less people can qualify for a loan, homes are not selling very well and there is a large inventory on the market. However, these baby boomers usually do not have trouble qualifying for financing and half of them buy their retirement homes with cash. This is a great market to target given the circumstances.

Another target market is the green movement. The whole philosophy behind Daybreak promotes sustainable communities. This “green” philosophy is not necessarily embodied in a 5000 square foot house. (Although some homes in Daybreak exceed this size) Even with the energy saving appliances and energy star certified home, a house that big is an energy waster if you have a small family. More than likely you don’t use half of the rooms of that house daily. Rising utility and maintenance costs of a home that large is becoming more of a disincentive to potential buyers as well. Another disincentive is the rising cost of transportation. If you live in South Jordan , chances are that you work somewhere else in the valley and commute. This will be a problem for Daybreak residents in the near future, but in 2010 TRAX will alleviate that burden for some residents and the Mountain View Corridor (Later) will be the choice of others.

Preferences are changing along with demographics as a survey from the National Association of Home Builders has found that 60% of home buyers now prefer an amenity-rich smaller home. Studies also suggest that buyer preferences toward huge suburban lots are also waning. Caring for a full acre of property can be time-consuming and expensive. With both of these resources becoming more scarce, it is no wonder buyers are looking for small lots or maintenance free communities. If the trend toward smaller homes continues, then it could make a big difference in home values. A recent study by the online appraisal service Zillow.com found that less expensive homes appreciate more than expensive and presumably larger homes. If this trend continues, we will probably find that Mcmansions will represent the weakest portion of the market.

Many will say that with a low-interest mortgage you will get more house for your money. However, you will also get higher insurance premiums, utility bills, maintenance costs, and higher property taxes. With these costs and trends, homes in Utah will definitely get smaller. Those homes that are smaller, energy efficient, and convenient will also see the most appreciation in the future.

First-time Home Owners in Daybreak

I have talked to a lot of potential first-time home owners in Daybreak. You see them all the time. They are walking through the parks, at the visiting center, walking out of the model homes, and driving slowly while their heads swivel looking at the houses. These prospective buyers have been passed up by the whirlwind of appreciation that has lifted the Utah housing market in the last 5 years. If these couples had been old enough or bought at the right time, then they would have nearly 100,000 in equity to put down on their new house in Daybreak. As it is they can barely make a 3% down payment. For the most part, these seem to be honest hardworking people who just missed the boat. Many of them can no longer afford some of the town homes in Daybreak let alone an actual house. Because of this we will see a dramatic shift in the demographics of Daybreak. The main difference will be between Eastlake and Founder's Village.

Founder's village contains those original residents of Daybreak. These families bought their homes when the starter homes were going for the mid 100s. At the time you could buy a house with an income of just over 40,000 a year. Yes, two teachers together could easily afford to live in Daybreak. The down payment required was half what it is now. These "starter" homes are now selling between 265 and 330. Well out of the price range of the aforementioned teachers. These young families moved in at the right time. The 1100 kids that go to Daybreak Elementary are a testament to the demographics of Founder's Village. Eastlake on the other hand might be altogether different. Are young families still moving into Eastlake? Yes they are, but not near as many. Are these possibly teachers or blue collar workers? Not unless they were able to get in on the equity from the housing boom. No, these will be families that have already owned homes for a few years or have high incomes relative to the average income in Utah. Essentially these families are more likely to be established and have older kids. This will bring a whole new demographic to Eastlake. Instead of toddlers running around in the splash pool you might find teenagers running around the new swimming pool or lake.

Daybreak Demographics

When you study demographics you study the future. What does the future of Daybreak hold? Lots of kids. According to recent census information, 35% of south Jordan's population is under the age of 18. With another 31% falling between the ages of 18 and 44. Instead of a bell curve South Jordan's population looks like one large declining slope with a jagged peak in the middle. The most recent demographics of Daybreak indicate a whopping 43% of residents are under 18 with the majority of those between the ages of 0 and 3. Yeah lots of kids. No matter when I walk or drive the streets of Daybreak kids are out playing and having a good time. It makes a nice atmosphere. What about income? 75% of households in South Jordan gross more than 50,000 dollars a year with 25% making over 100,000. Much higher than average. People who live in South Jordan tend to be more educated with 31% holding a bachelor's degree or higher level of education. These demographics have been formed by a formidable population explosion. In 2000 the population was around 30,000, but now it has grown 67% to just over 50,000. City officials estimate that South Jordan's population will top out at around 90,000. This will probably happen once Daybreak has been completed. In short South Jordan as well as Daybreak are budding communities that will see years of substantial growth. This is definitely in drastic contrast with many older, but declining neighborhoods and towns in the Salt Lake valley. All of this bodes well for Daybreak residents as demographics such as these facilitate a healthy community. Hopefully it will stay that way for generations to come.