The economy and jobs are reshaping the household picture, a ULI panel says, as Gen Yers delay buying and boomers age in place. Among all groups, walkability and transit dominate the wish list.
GEN Y OPTIONS
To meet the challenge, developers and builders must find a way to provide products that Gen Yers can afford in locations they desire. Among their wants and needs:
- Urban settings or, if suburban, walkable town centers and mixed-use communities. They desire smart growth and density, and are willing to accept a less ideal home if they can walk to work and retail.
- A focus on work-life balance and connectivity.
- WINKs: Woman with income, no kids. This group, typically 26 to 29 years old, is highly educated. They’re renters, but are likely to buy before marriage. Like others, they desire walkable neighborhoods near transit.
- More young adults are delaying marriage; 85% of household growth will be households without kids, says Charles Hewlett, managing director of real estate advisor Robert Charles Lesser & Co.
BABY BOOMER TRENDS
Baby Boomers begin turning 65 next year. Here is how this group will continue to impact housing trends:
- They’re retiring earlier than previous generations; however, many still work, either part-time, in a lower-level position, or as a consultant.
- Many will age in place; however, in 10 years, we will see increased demand for seniors housing as the first wave reaches the mid and late 70s.
- The earlier prediction that baby boomers will move to downtown urban areas has not happened, Hewlett says. But they are looking for what he calls “safe urbanism”—walkable, denser areas with transit.
- They want locations with an affordable cost of living and quality healthcare. Both of these factors trump climate, Hewlett notes.
- They look for communities with opportunities for continuing education, culture, and an active lifestyle.
- They still count Florida and Arizona among the top five retirement locations, but the Carolinas, with slightly cooler temperatures and lower threat of hurricanes, are becoming their new Florida, Hewlett says.
Among the challenges and trends across markets:
- Golf course communities are out; conservation communities with passive open space and trails are in.
- Walkable, transit-oriented communities or those with town squares are “going to be a key part of creating projects that attract interest,” says Jones.
- Immigration will continue to be a huge housing influencer; however, where previous generations settled in urban areas, many new immigrants are heading straight for suburbs, says Hewlett.
- In the rental market, green is still being driven more by investors than consumers, Jones reports.
- The U.S. will grow by another 100 million people by 2040, and 60% of that will come from just 20 metro areas, primarily in the coastal areas and the south.
Finally, there’s the question of what will happen to the McMansion. In new construction, too-large houses have fallen out of favor—but what about existing homes? The vast gap in numbers from baby boom to Generation X, along with continued economic woes and shifting tastes, left one panelist to wonder who will buy baby boomers’ larger houses and what further impact those properties will have on buying trends over the next few years. Stay tuned.