During the 50th Annual Real Estate Journalism Conference in New Orleans, which lasted from June 8 – 11, economists from different segments of the industry presented their on-going studies about current standing of the real estate market.
The National Association of Realtors (NAR) recently released a fact sheet the states that the median first-time home buyer age 30 and many millennials are already in-transition to the phase where they directly affect the housing market structure.
In addition, Jonathan Smoke, Chief Economist for the realtor.com said:
“At any given time in our history, demographics would explain 60-80% of what’s happening [in the market], and we are in a period of time where Millennials make up a largest demographic group according to the Census, at 84 million.”
Factors that Call for Change in the Traditional Approach
Millennials or those who were born in 1982 and above have a different approach and outlook on the system and the industry. While the desire for current “home renters” to own a property is 84% percent strong, 36% believe they don’t have the means for a home and 60% don’t believe in mortgage.
Despite the efforts of the pre-existing systems, many potential homebuyers are gradually disqualifying themselves by not conforming.
The National Multifamily Housing Council also states that both Millennials and Baby Boomers often compete with each for the same kind of necessities such as real estate, but the end result all boils down to indecisiveness.
Both groups, which now dominates the influencing part of the economy looks for cheap and practical locations.
The Influx of Suburban Preference over the Cityscape Life
The idea of suburb preferential living is indeed contradictory to the progress of the nation and the economy. However, “It’s universal human values. It’s not everybody’s ideal, but some people want a version of urban housing that works for people throughout their lives,” said Zeppelin, a Denver-based developer.
Year over year, real estate conference all look at maximizing the value of each square foot in most cookie-cutter apartments and condominiums and nothing else. But, this approach doesn’t really appeal too much to the Millennials and Baby Boomers at all.
“A small footprint doesn’t matter to them if it’s, say, under $1,000 and gives them the amenities, functional space, and lifestyle they want. This campus-like setup offers people more of what they want, and more time to do what they enjoy. The American dream in the suburbs is overrated,” Zeppelin added.
Societal Limitations that Encourages Mainstream Boycott
Contrary to popular opinion, all Millennial just like every other preceding generations desire stability in life. However, the number one barrier for the younger generations is the system itself.
“Millennials are the first generation to come of age in a post-almost-apocalyptic housing market, where lenders, eight years later, are still paying billions in reparations for mortgage misconduct and outright fraud,” says Diana Olick of CNBC.
As long as the system persists on burdening the present generation from the antecedents of the past collapses in the economy, the situation would only get worse.