Millennials (M’s) have recently become the largest demographic group of U.S. homebuyers, eclipsing 35% of the market. Born after 1980 and into the mid-1990s, M’s, also known as Gen-Y’ers, include over 50 million of our population.
Much of our society, and certainly the media, has painted this group as somewhat wayward, and employable in a much different way than their parents and grandparents were.
There may be some truth to those observations, however they are learning, developing, and aging in fine fashion. As they mature, many have a great desire and drive to grow both professionally and personally. They have achieved higher levels of education and show a propensity to develop strong budget skills and long term planning. They are tech savvy, social, optimistic, and good multi-taskers. They have learned incredible lessons as they witnessed one of the worst financial meltdowns in history.
Keep in mind, they were entering the workforce before, during and after the recession.
While M’s tend to question laws of organization and investments in general, they have also learned that owning real estate long-term is not only the safest investment, but also self-directed. The older M’s – in their mid-thirties – are spending their money on appreciable assets like the stock market and real estate as opposed to cars, lots of clothing, and other depreciable items. They average 30K in student loans and make it a priority to pay that and other debts as quickly as possible. They carry fewer credit cards and average only $2,700 of cc debt, which is 40% less than the national average. Less than half M’s own cars, especially in larger metro areas. Not only do they not carry car debt and related liabilities, but this is also the rationale behind new apartment buildings and condos; building far less available parking. According to Pew Social Trends, M’s have the highest High School graduation rate (72%) with over 60% going to college. Sixty percent of M’s either own or plan to buy a home within the next year. Many urban M’s are squeezing into new buildings offering studios with 400-500 sq ft and living in an efficient world. Older M’s are having families and are becoming more concerned with bedrooms, yards and schools.
The Baby Boomers (BB’s) were born between 1948-1964 and total nearly 78 million. They comprise 25% of the population, but control 70% of our financial assets and are responsible for 50% of discretionary spending. Today, 80% of BB’s own their homes while 25% of those own at least one other type of real estate such as a vacation home or rental property, and according to Trulia are 31% of all home ownership. They both want and need to work and will do so into retirement years. A variety of reasons include off-setting investment losses from 2000 thru 2011, supporting aging parents, helping their own children, medical expenses, and supplementing retirement income as we live longer. So what is this demographic looking for?
Preferred finishes include:
Millennials and Baby Boomers are the two largest demographic segments in the real estate market today. Their needs and desires change to meet their lifestyles. This article is written to address fairly and comprehensively, some current trends and considerations buyers and sellers are focusing on.
Millennials will continue to grow strong as first time and move-up buyers for the next decade, and beyond. Baby Boomers have been and will continue to be empty nesters who will be retiring with new lifestyle plans, and shall prove to make moves that represent a higher dollar volume of sales in general. They are the wealthiest demographic in the U.S. and as such, will command much attention to their needs and wants. Whether in the metropolitan cities or in the resort towns, they bring the majority of wealth and equity to the market, including helping the M’s purchase their homes.
It is an ever-changing and fascinating real estate world to enjoy, appreciate, and possibly participate in.
To access current market reports visit www.coloradomarketreports.com. For more information, contact downtown managing broker, Steve Blank, of LIV Sotheby’s International Realty at 303.520.5558. To service all of your real estate needs visit www.livsothebysrealty.com.