The millennials are hot property these days, including when it comes to real estate. They are renting and buying more than expected. But then I discovered another group that is competing for the same real estate.
First, to millennials.
I have listened to my students and read that young people don’t want to take on the weight, financial and otherwise, of buying real estate, and that they want jobs that allow them great personal flexibility and work that has meaning. All that might suggest renting is their gig. For many it is. But not for all.
According to Steve Brown of The Dallas Morning News, the group represents about 30 percent of the residential real estate buyers in the country. Millennials are 60 percent of first-time buyers and outpace every other generation in home purchases. They are leaving their apartments and their parents’ basements to find space that is near work and the activities they love, so they can walk or bike. (That gets to the impact on driving, another column in itself.)
They are also tough customers. Millennial Nicole Weinberger, in National Real Estate Investor, makes it clear that her generation wants information easily and immediately, and technology is crucial to make that happen. Real estate firms will need to offer interior videos of properties, provide easy ways to schedule and exchange information and prepare for Yelp-type reviews. This is a group that is increasing demand but is also increasingly demanding.
Yet these same young people will be competing with another group — often their parents. A recent study by Harvard’s Joint Center for Housing Studies, reported by Andrew Soergel, suggests that much rental space is being scooped up by people in their 50s and 60s, who account for 55 percent of recent U.S. rental-market growth.
Maybe this dual market portends multiple niches — some apartments with mountain bike racks and few parking spaces, others with more on-site gyms or massage options.
Nancy Napier is distinguished professor, Boise State University. firstname.lastname@example.org. This column is part of the Jan. 20-Feb. 16 edition of the Idaho Statesman’s Business Insider magazine.