CHANGES IN HOUSING PREDICTIONS

By
Real Estate Agent with COLDWELL BANKER RESIDENTIAL BROKERAGE

Like it or not this is reality:

-Aging baby boomers (55 to 64 years old)- Although they are nearing retirement age, many will keep working out of necessity or by choice. Some will be forced to stay in their suburban homes until values recover. Those who are able to move will not choose traditional retirement locations or senior housing, opting instead for more mixed-age living environments that cater to their active lifestyles. Suburban town centers with a walkable urban "feel" will appeal to this group.

-Younger baby boomers (46 to 54 years old), now in or entering their prime earning years- This group will also face a tough time selling suburban homes, hampering the ability of these boomers to move. Because the recession has left many younger boomers with flat incomes and less home equity, their ability to purchase second homes will be greatly diminished, curbing prospects in general for the second home market. However, like their older counterparts, they will be drawn to more connected, compactly designed communities when they are able to switch houses.

-Generation Y- This tech-savvy generation has a population of about 86 million, more than the baby boomers. Gen Yers place high value on community; on places (either virtual or actual) to gather and share information, ideas and opinions. As they enter the housing market, they will be far less interested in homeownership than their parents were when they were young adults. (The recession, said McIlwain, has "tempered the interest of Gen Yers in buying their own homes and they will be renters by necessity or choice for years ahead"). Despite having small incomes, Gen Y will gravitate toward walkable, close-in communities, choosing isolated housing on outer edges only as a last resort because it is the most affordable. Green, "net zero" homes powered exclusively by alternative energy will have strong appeal to this group.

-Immigrants- Already 40 million strong, the total population of legal and illegal immigrants in the U.S. has an even greater impact when the children and grandchildren are included as a factor. The tendency of immigrants to cluster, and to live in multi-generational households, suggests that they would prefer larger homes if they could afford them and if the homes were in neighborhoods with a strong sense of community.

All of these groups have some characteristics that reflect a desire to live in more pedestrian-friendly, transit-oriented, mixed-use environments that de-emphasize auto dependency, whether the location is urban or suburban, McIlwain noted. Among the majors factors driving urbanization: 1) growth of two-person households and single households without children (among both baby boomers and Generation Y); 2) a halt to baby boomer migration to the suburbs; 3) the likelihood of Generation Y to rent rather than own; and 4) public policies encouraging compact development.

 

Comments (1)

Tony Cordi
Tony Cordi, Broker (Beachtime Realty) - Hermosa Beach, CA

Very thought-provoking.   Thank you for the post Gloria...

Jan 29, 2010 02:25 AM

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