Get ready for the next wave of home buyers — it’s going to be a whopper. The Millennials, that demographic group also known as Generation Y or the Echo Boomers, number 80.8 million, according to the U.S. Census Bureau. Accounting for immigration, the Bureau estimates that Millennials could number 92.9 million by 2025.
Millennials are challenging for home builders because they’re hard to define. The youngest are teenagers, the oldest are in their early 30s. Some want an unfettered, hip, urban lifestyle while others are looking for a more traditional home in which to raise a family. In short, there is no one buyer profile for this generation.
Take, for instance, Jerry Gloss’ children. The co-principal of KGA Studio Architects (previously known as Knudson Gloss Architects) in Louisville, Colo., has a 22-year-old and a 28-year-old. “The youngest is going, ‘Man, I’d love to live in a loft near downtown and be able to walk to the art gallery and the local beer joint,’” Gloss says. “The one who’s 28 has had a career for four or five years and is already talking about marriage and kids.”
Younger Millennials are more attracted to rental housing than for-sale housing, partly because of their youth and partly because mortgage financing is so difficult to obtain.
“Also, they’re not in a place where they should buy because most of them don’t know where they’re going to be five to seven years from now,” says John McIlwain, senior resident fellow for the Urban Land Institute in Washington, D.C.
Older Millennials (the married-with-children segment) are the most likely to buy townhomes or detached homes. However, they comprise only a small percentage of Generation Y, says market analyst Todd Zimmerman, co-managing director of Zimmerman/Volk Associates in Clinton, N.J. “The rest of the Millennials have seen their older siblings, parents, and friends burned, so the bloom is really off the rose,” Zimmerman says. “And whether they will return to homeownership in the way that predecessor generations did is anyone’s guess.”
He emphasizes that Millennials don’t want a suburban existence that makes them totally dependent on the automobile, like their Boomer parents. “Neighborhood is first — a walkable neighborhood. They will not compromise about that.” They’re also seeking authenticity, informal layouts, and space that functions well, not just square footage for its own sake. And they’re very much into cooking as entertainment (cooking outdoors is part of that trend).
But in some ways, Millennials and Baby Boomers are alike. “Boomers and Millennials are both at a life stage — empty nesters and just leaving the nest — where they value community for social and cultural interaction,” Zimmerman says. Like the Boomers did, Millennials are choosing to marry and have children late in life, though Millennials are delaying those events even longer. Rest assured, though, when this generation is ready to buy, they will have a tremendous impact on the housing market.
Practicality wins
Compared to earlier generations, older Millennials are more pragmatic about their housing needs, says Vance Graham of Bassenian Lagoni Architects, Newport Beach, Calif. “The death of the living room has pretty much been announced,” says Graham. “Everyone is moving to the great room.” There is still demand for both informal and formal dining spaces, but the formal dining room must have some flexibility. “It could turn into a den, for instance, so its position in the home needs to work in multiple fashions,” he says.
The mudroom has seen a rebirth of sorts, Graham says. “It has different personalities,” says Graham. “It can be a home management space, a storage area for bulk items, or a true mudroom — a transition from outdoor activities into the house.” Second-floor bonus rooms are also making a comeback. “In terms of square footage, it takes the place of the living room. You’ve got the great room downstairs for family gatherings and a play area for the kids upstairs,” he says. In homes that are less than 2,200 square feet, Graham says the bonus room may become an optional bedroom or game room, depending on the buyer.
by Professional Builder, March 2011
Susan Bady, Contributing Editor
Monday, April 25, 2011
Next Generation (Y) of Living!
Your answer says a lot about your values and attitudes -- and may have a lot to do with when you were born. So say the authors of a new study of 1,000 home owners nationwide. The market research company GfK Roper Reports asked Americans to prioritize the amenities they'd have in their dream home -- not necessarily amenities they already have, or will have in their next home. The different responses, from baby boomers through first-time generation-Y buyers, reflect how different features appeal to different ages and also how tastes have shifted over time.
"I think what the study reveals is very different value sets among the generations," says Kathy Sheehan, senior vice president for GfK Roper Reports, which surveys the American consumer for Fortune 500 companies.
Definite patterns emerge from the survey data, Sheehan says, and you can glean some potentially important insights -- especially if you're considering pre-sale renovations. But first, here's a review of the survey results:
Boomer dream homes: the picture of success
Baby boomers, those born 1946 to 1964, rank a state-of-the-art kitchen No. 1 on their list of must-haves, with walk-in closets, whirlpool baths, fireplaces and swimming pools rounding out the top five. They also rank a workshop/hobby studio highly. (You can see a full list of each generation's top 10 below.)
What's your home worth?
Sheehan explains: As they're becoming so-called "empty nesters," boomers think about having a private retreat that's as much gallery as home. They waited until later in life to have a grand home, and now they generally want to flaunt its many niceties -- a home where they can age (extremely) gracefully. "It's about the show," she says, with amenities such as a grand kitchen and places to display art. In a nutshell, the boomer home says, "I've made it."
Generation X: family-focused informality
Those born roughly between 1965 and 1978 also place a high priority on a fine kitchen and on amenities like large walk-in closets. As these sons and daughters of baby boomers age, their aspirations for dream houses are now dovetailing with those of their parents, says Sheehan. The reason? This generation has moved into child-rearing age, says Sheehan, and now "want stuff that speaks to organization." Their buzzword: family.
"Gen X-ers are at childbearing age," Sheehan says. "That means that Gen-X homes are about the family center. They are looking for things that help them organize and eradicate clutter and chaos."
But Gen X-ers are notably different from boomers, too, says Sheehan. For one thing, "Gen X-ers have different attitudes about family and disciplining their children." Those different attitudes show themselves not only in how these former slackers prioritize their dream amenities, but also in how little they like the formality of boomer homes; they want a casual home, says Sheehan.
They're also much more in tune to style and design, and know exactly what they want in a home -- and are less inclined to settle for less, she says.
Generation Y: Let the good times roll
Gen Y-ers, those born after 1978 to about 1995, want a home that hollers "entertain me." Top-10 priorities include a whirlpool bath, sauna/steam room and entertainment center. "All of these things are about fun," says Sheehan.
That might explain why gardens and workshops don't make an appearance on the Gen-Y list.
And they're clearly not yet worried about accommodating children. This generation is emerging socially, and wants amenities that enhance that aspect of its life. So instead of a place to hunker down, Gen-Y homeowners "might be more interested in the home as a social hub," says Sheehan.
Technology is also second-nature to this generation. They're completely wired. So a Gen-Y home, more than any other, will practically hum with electronics.
Some common ground:
So, how immutable are these traits, anyway? Observers say attitudes about homes do change as people enter different stages of their lives: Witness the Gen X-ers who want high-end kitchens now that they're nesting, just like their boomer parents before them.
But the study turned up somewhat unexpected results, too. For Gen X-ers, "It's a little more surprising that their values seem to be staying with them as they age," says Sheehan, mentioning attitudes such as informality. "There might be life-stage changes, but the values will remain consistent." Another is the Gen Y embrace of technology. That shouldn't be expected to dissipate, either, she says.
Perhaps most interesting to home owners renovating with an eye toward selling their home are the features the generations agreed were important. Walk-in closets made an appearance in the top three on all three generation's lists, for example. And those state-of-the art kitchens ranked No. 1 for both boomers and Gen X-ers -- and made a not-so-shabby appearance at No. 6 for the Gen-Y set. Other features cracking the top five for all three generations:
Whirlpool baths
Swimming pools
Fireplaces
By Christopher Solomon of MSN Real Estate
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