SURVEY-Parents buy homes within 30 minutes of family

Reuters

* 42 pct of parents live less than 10 minutes from family

* Indicates less demand for far-flung suburbs

* "Milestone" events, not upgrading, driving homebuying

By Helen Chernikoff

NEW YORK (Reuters) - Almost three-quarters of the parents in the United States who own a home bought within 30 minutes of family, according to a survey sponsored by brokerage Coldwell Banker Real Estate.

Forty-two percent of the homeowners polled -- all with children age 18 and under living at home -- bought a home less than 10 minutes from family living closest to them, while 30 percent located within 11 to 30 minutes of family.

Some might consider the finding a postive affirmation of the importance of family ties, but for most homebuilders it is a problem. It's at odds with their traditional business model.

Historically, builders such as No. 1 D.R. Horton Inc , PulteGroup Inc and KB Home have emphasized detached, single-family homes on land that is cheap because of its distance from densely populated areas such as job centers, said Morningstar analyst Mike Gaiden.

What those buyers want is "suburban and infill," Gaiden said. They are exhibiting a new taste for multifamily housing located on smaller sites, he said, in a move away from conventional single-family homes.

"Family is the most important factor, that's what this survey says," said Diann Patton, a Coldwell Banker realtor.

The shift toward demand for multifamily housing like apartment towers is reflected in the recent relative share performance of multifamily real estate investment trusts and homebuilders.

REIT Equity Residential's shares are up 43 percent so far this year while BRE Properties Inc is up 29 percent.

The Dow Jones U.S. Home Construction Index , which includes homebuilders, is down 11.5 percent.

Luxury homebuilder Toll Brothers Inc has the most experience building in high-density areas.

But the average price for a Toll Brothers apartment in northern New Jersey or New York City is $1 million or more, Chief Executive Doug Yearley told analysts on a conference call after the company last released quarterly earnings.

Especially as the broader economy remains soft and new families stay close to home for the security it offers, smart homebuilders will figure out a way to give buyers affordable homes and proximity to family, Gaiden said.

The survey indicates that life events like birth and marriage are generating housing demand. But to grow, the industry needs more than that.

"People buy and sell houses around life's most important milestones," Patton said.

Households with children under age 18, the group Coldwell Banker surveyed, were about 31 percent of total U.S. households, according to the latest census data. As families' need for space increases, they become a prime market for homebuilders.

"Demand never goes to zero," said Jody Kahn of John Burns Real Estate Consulting, a firm based in Irvine, California, that advises homebuilders. "But when the market is better, people buy for other reasons."

Coldwell Banker hired International Communications Research to conduct the survey, which was done by telephone during July and August among a nationally representative sample of more than 850 U.S. homeowners who are parents or guardians of children under the age of 18. (Reporting by Helen Chernikoff; Editing by Steve Orlofsky)

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