I remember when he said it for the first time. My son had driven back to his college apartment after spending the weekend with me. Calling to tell me he’d arrived safely, he said, I’m home. He still treats my home like his own – filling the house with friends who take over the kitchen and living room. But hearing him say those words reminded me that he is really independent. This got me thinking – it won’t be long before he’s out of college and searching for a new home.
What will his needs, likes, and dislikes be?
Will they be different than mine? If so, why?
My son, along with many of my friends’ children, is a member of Generation Y. This sought after group is 70+ million strong – almost double the size of the previous generation. Its sheer size will have enormous influence on the real estate industry and the economy in general – an impact likely to be as long-lasting as my generation, the Baby Boomers.
Like you, I want to understand what is important to Generation Y. In a previous blog, “Getting the Attention of Generation Y”, we discussed how this generation may search for a home. Here, we seek to understand more about that search – what kind of home are they searching for? Is it the same kind as their parents’? Let’s consider three points.
LOCATION
As stated in Housing In America- The Next Decade, a 2010 in-depth overview of the future of housing published by the Urban Land Institute (ULI):
Early signs of new trends in U.S. housing markets have been present for years now.
These trends will become stronger following the recession and affect where people live, whether they own or rent their homes, and the size and style of the homes they choose.
These choices, whether made by desire or necessity, will be very different from those made by people over the years since World War II, the period of the great suburbanization of America. The coming decades will be the time of the great reurbanization as 24/7 central cities grow and suburbs around the country are redeveloped with new or revived walkable suburban town centers. [Housing in America, The Long Term: Expect the Unexpected, page 10]
Urban living is what they want, but urban “like” living may be their reality. Their budget will ultimately decide. This poses a challenging situation for both renter and developer. While developers chase this massive generation, the cost of developing in urban markets demands a higher rent than most are willing and able to pay. Could this lead to more doubling up or smaller apartments? It will certainly be a factor when determining unit mixes. Another consideration for developers is building close enough to urban markets so that renters can take advantage of the activities without the long commute.
Regardless of the results, from an economic stability standpoint, it is refreshing to see this generation being realistic about what they can and cannot afford. If urban living is too expensive, then urban “like” living will do.
OR, they may sacrifice luxury for location. Jason Dorsey, The Gen Y Guy, says it’s all about experiences. “In Austin, people want to live near the music, the Frisbee-golf parks, and walking distance to great restaurants that are happening.” He went on to say that if you want to command the attention of Gen Y, talk about amenities that are in walking distance from your community.
WOMEN DOMINATE!
An increasing number of studies report that Gen Y women will dominate the workforce. Yes, you heard right! Further research reveals that there are now more women in colleges and universities than men for the first time in U.S. history. They are also earning 60% of master’s degrees. This group is being referred to as WINKS--Women with Incomes and No Kids.
According to RCLCO, a leading knowledge solutions provider to the real estate industry, WINKS could represent 34% of all Gen Y by 2015. Their consumer research into Gen X and Gen Y women uncovers the following:
- Gen Y female-headed households prefer living in urban or urban-like settings
- Convenience is key
- They want to walk to work, restaurants, entertainment venues, and shopping places
- They are career minded
- Over half have income of over $50,000 per year
This could mark a departure from typical home-purchasing patterns, and once again, their “parents’ home” in suburbia. Overwhelmingly, this research shows that Gen Y women need to be physically active. Catering to them could be as simple as bigger and better fitness centers, biking trails, community running groups, hiking trips, etc. This means that some easy changes could put your community back on their search list!
INSIDE AND OUT
So what kind of interior/exterior does Generation Y prefer? According to discoveries made at the National Association of Home Builders conference held in January, 2011, formal living rooms, soaker bathtubs, and three-car garages are out!
Even though much of the conference focused on the housing needs of aging baby boomers, the fact that their kids actually represent an even larger demographic could not be ignored. Once again, surveys showed that 88% of Gen Yers want to be in an urban setting, where they can walk to shops, restaurants, and mass-transit.
Now I get it! If they don’t have a car, they certainly don’t need a three-car garage!!
So what else?
They don’t want…
- Cookie-cutter homes
- To mow a lawn
- A huge bath tub
- A dining room
They do want…
- Enough outdoor space to have a grill and some friends over
- Smaller rooms
- Bigger shower stalls
- Plenty of living room space for home theater type set-up as TV, movies, and video games are part of daily life
Residential designer David Senden says, “Gen Y wants a home that’s a cross between a hotel lobby and the set of “Melrose Place.” He christened the Gen-Yers who are delaying marriage and family as “dawdlers.” These dawdlers are likely to want a place that will accommodate a dog bed or cat castle – not a crib or play kitchen.
Generation Y is on the hunt for a home – and it isn’t their parents’!
Are you re-evaluating your floor plans, interior and exterior features, and price points to make them more attractive to Gen Yers? If not, you might be missing an incredible opportunity! Remember, changes made today will pay off tomorrow!