It’s a fact neighborhoods have transformed over recent years. As the U.S. population changes, our communities are becoming more diverse and homeowners are experiencing new and challenging situations. As the pace of life speeds up and technology expands, people are connecting with each other less.

As a service to the industry, AAM produced a research report highlighting the challenges facing American neighborhoods. The report is intended to shed light on how homeowner association (HOA) boards and homeowners can overcome these difficulties. The findings highlight what members must know to survive and even thrive in this complicated environment.

Research Report Background

As we analyzed current trends in American neighborhoods, we began to see a different picture. Therefore, we decided we needed to investigate these trends more fully.

We partnered with two third-party research firms to help us conduct the study. The two marketing research firms have a combined 40 years of experience. With AAM’s thorough understanding of the industry and our partners’ expertise in marketing research, we uncovered findings that led us to identify the major challenges affecting today’s communities.

The 5 Most Significant Challenges Facing American

Neighborhoods

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To arrive at our conclusions, our research team surveyed nearly 600 homeowners living in HOA communities, 80% of which reside in Arizona. The make-up of the targeted demographic in terms of neighborhood longevity was as follows:

• More than half of respondents have lived in the neighborhood for 1-5 years.• Less than a quarter have lived in the neighborhood for less than a year.• Less than 10% have lived in their neighborhood for more than 10 years.

The following sections represent the top five challenges facing today’s American neighborhoods.

Challenge #1: Traditional Neighborhoods and the “American Dream” Do Not Fit the Stereotype

The American Dream is captured in many of the stereotypes of the 1950s. These stereotypes can be characterized by traditional families, home ownership, achieving more than one’s parents did and raising a tight knit family with a mother and father. Homeownership and the suburb have been two of America’s most treasured stereotypes. But do they still ring true today?

According to a New York Times and CBS News poll conducted in June 2011, the world has indeed changed. Although about 90% of those surveyed said home ownership is still an important part of the American dream, nearly 25% said their home was now worth less than what they owed on their mortgage. To these respondents, the American Dream seems far away.

And, a National League of Cities (NLC) study in 2011 found the following percentages of Americans say they are not living the American Dream. This trend is affecting nearly every facet of the population:

• 53% of African-Americans• 36% of Hispanics• 32% of Caucasians• 52% of Single Parents• 27% of Married Parents

AAM Study Findings: Homeowners’ Beliefs about the American Dream

The AAM study found more than 70% of HOA homeowners surveyed believe the American Dream includes the ability to buy a home and provide a better life for themselves and their families. Specifically, the percentages attributed to the top responses for Arizona homeowners’ beliefs about the American Dream include:

The ability to create my future and determine my own destiny 79.10%The ability to provide a better life for my family 75.50%The ability to make a good living/have a good job 74.00%The ability to buy a home 70.60%

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AAM Study Findings: Reasons Homeowners Chose Their Neighborhood

Homeowner respondents indicated they chose their neighborhoods primarily because they felt safe and the neighborhood met their financial requirements. There’s no question Arizona homeowners want the safety and security of the American Dream. Specific findings include:

Felt like it was a good investment 80.90%Best neighborhood in buyer’s price range 83.40%Neighborhood feels safe 87.10%

Challenge #2: U.S. Population and Living Situations are More Diverse than Ever Before

According to a New York Times and the Daily Beast study, suburbs now provide more jobs than cities. The March 2012 results also found a million more suburbanites nationwide are living below the poverty line compared to city dwellers. In fact, 51 million households had incomes less than 50% above the official poverty line.

A major contributing factor to this troubling finding is the housing crisis. Suburban governments and suburban homeown-ers are being flattened by the unraveling of the housing market. Today, there’s not much of a distinction between subur-banites and urbanites.

Other significant findings challenging today’s neighborhoods include:

• Minorities are most affected by economic booms and busts. Minority home buyers were much more likely than Caucasian to use high-cost loans. And, as housing credit has tightened, minority borrowing has disproportionately declined. Hispanics/Latinos have seen the largest declines. (Urban Institute, 2008)

• The Hispanic/Latino population is rising considerably. Predictions indicate that between now and 2020, Hispanics will account for 50% of new home buyers. (William H Frey, U.S. Census, 2011; Forbes, Movoto.com Survey, 2011; National Association of Hispanic Real Estate Professionals, 2011)

• U.S. population growth today is the flattest it’s been since the 1940s. Even booming Sun Belt cities such as Phoe-nix and Dallas slowed dramatically. Phoenix dropped from 34.3% growth one decade to 9.4% the next. The nation as a whole grew only 9.7%, down from 13.2% in the 1990s. (U.S. Census, USA Today)

• The U.S. population is aging. Between 2000 and 2010, the 45 to 54 age group grew 19%, the 55 to 64 group by 49% and 65 to 74 age group jumped by 16%. (William H Frey, U.S. Census, 2011)

• Families are changing. The U.S. marriage rate is at a record low. One in four singles lives alone and loves it. The new norms include multi-cultural families, unwed parents, foster families, divorced adults, diverse unions, adoption with no marriage, marrying after a baby, single parents and multi-generational homes. (U.S. Census; USA Today, 2012; Parents.com)

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So what do these trends mean for today’s neighborhoods? Catalyst Analytics found in 2011 that in a large city the price of a home in one area of the city can be dramatically different from the exact same home just eight miles away. The same holds true for the make-up of the individuals living in virtually same homes just eight miles apart. Major differences can exist in income, age, ethnicities, number of persons occupying the home and significant differences in their lifestyles and spending patterns.

AAM Study Findings: Arizona HOA Communities Represent a Major Exception

HOA communities seem to have bucked many of the negative trends affecting families and home ownership. Nearly two-thirds of neighbors surveyed live with a spouse. The demographics of the HOA survey respondents are:

Gender Male respondents 60.50% Female Respondents 39.50%The ability to make a good living/have a good job Less than 24 1.00% 25-34 12.30% 35-44 18.20% 45-54 18.40% 55-64 26.00% 65+ 19.80% Rather not say 4.20%Ethnicity White / Caucasian 77.00% Black / African American 3.20% Hispanic / Latino / Spanish-American / Chicano 6.90% Asian / Pacific Islander 4.20% American Indian / Native American 0.30% Other 1.00% Rather Not Say 7.3%

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Challenge #3: Americans are Feeling Instability

Americans are worried about the future. A persistent housing slump and lingering unemployment have contributed to a general feeling of instability. Across the country, Americans’ biggest concerns include jobs, unemployment, the economy, and debt. In Arizona, homeowners have concerns similar to those of people around the nation: the economy, family, and finances.

According to an October 2011 Reason Rupe opinion poll, jobs/unemployment and the economy lead the concerns of Americans nationally. In fact, 47% of respondents rated these two concerns the highest.

AAM Study Findings: Arizona Homeowners are Concerned about the Economy, Family and Finances

In Arizona, our study found the economy, family and finances top the concerns of homeowners. Specifically, the findings related to a feeling of instability included:

Biggest Concerns for Arizona Families Economy 71.10% Family 70.60% Finances 68.40%Factors Contributing to Concerns Arizona unemployment rate above the national average (U.S. Bureau of Labor Statistics, September 2012)

8.20%

Arizona is number four in national foreclosures (August 2012) 1 in 360 housing units in foreclosure

Crime is on the rise in Arizona (FBI, UCR and DOJ) 188.69 to 296.48 aggravated assaults reported per 100,000 people in metro Phoenix area

in 2010

Challenge #4: People are Distracted and Disconnected

A 2010 John Burns Real Estate Consulting study and a 2012 USA Today report found Americans are busy, distracted, self absorbed and transient. Technology gets in the way of communicating in person and Americans spend a lot of time in their cars. Adding to the disconnection, neighborhoods have walls for safety that keep people out. The office workplace is shrinking as technology creates workplaces everywhere. Finally, more Americans are renting rather than buying, creating a more mobile society.

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Challenge #5: Neighborhoods are Not Working in America…but We Want Them to

A StateOfNeighbors.com study from July 27, 2011 found neighborhood relationships are struggling. Nationally 83% of Americans are willing to pitch in and help neighbors who are struggling financially. But, only 25% of Americans know most or all of their neighbors’ names.

In addition, nationally 86% of Americans say that neighbors affect their happiness at least a little, and it’s remarkably consistent whether you live in urban, suburban or rural settings. But, 66% of urban Americans and 54% of rural Americans have a complaint with a neighbor.

AAM Study Findings: Compared to Nationally, More Arizonans Know Their Neighbors

In Arizona, nearly two-thirds of Arizona homeowners surveyed know some of their neighbors by name. But, just a quarter know most neighbors by name. More than half of Arizona homeowners invite neighbors over or look out for neighbors when they are away. But less than a quarter feel comfortable enough to ask a neighbor to watch each other’s pets or children.

In terms of how neighbors would like to interact with their neighbors, more than half of Arizona homeowners would like to get together socially and be able to depend on a neighbor to look out for each other’s house. More than 30% would like to be able to lend each other something, eat together or watch each other’s pets.

Actual findings are listed below:

How Respondents Interact with Neighbors Care for and look out for their house 69.90% Invite them into your home 52.70% Watch each other’s pets 22.40% Watch each other’s kids 13.70%How Respondents Would Like to Interact with Neighbors Get together socially 64.00% Care for and look out for their house 62.30% Invite them into your home 57.80% Watch each other’s pets 30.10%

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Challenge Summary

As indicated above, people want the American Dream but don’t have it, communities are more diverse, people feel instability, people are disconnected and neighborhoods are not working in America. But there is a light at the end of the tunnel.

According to our Arizona study findings, neighbors primarily communicate face to face. In fact, 61.50% of respondents indicated they currently communicate with neighbors face-to-face either one-on-one or in small groups. Although this is great progress, communication is always challenging because of our busier lives. Jam-packed schedules may contribute to the lack of familiarity neighbors have with each other.

Arizona homeowners would like to increase their face to face interactions. They would also like to interact more by leveraging technology including email, phone and social media. Study findings concluded 75.80% wanted face-to-face communications and 52.50% would like to participate in community events.

With regards to HOAs, Arizona homeowners primarily expect their board to keep their neighborhood clean, safe and financially solvent. But, they also would like their HOA to help increase positive interactions between neighbors. The data from this study leads us to believe the American homeowner wants and deserves more.

About AAM: Creating a Better America, One Neighborhood at a Time

At Associated Asset Management, we’re proactively addressing the real challenges facing American communities to-day – including the five we’ve talked about here. We’re a vital part of our communities, and we’re in it for the long haul: 70 percent of our community managers have been with us for more than three years, and 76 percent of our communities have been with us for more than three years. We deliver real value for developers, HOAs, and homeowners by improving the quality of connections between our homeowners and boards, improving the financial health of the communities where we work, and raising the bar for the industry.

AAM is one of America’s most-respected Homeowner Association (HOA) management companies. With more than 20 years of community management company experience to our credit and hundreds of associations under management, we are dedicated to creating a better America, one neighborhood at a time, starting with yours. ¬ Learn more about how we can help you create a better community. Visit www.associatedasset.com today.

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