As the housing market recovers, a lot remains to be seen. What kind of homes will Americans favor and builders bring to life? Will all those half-finished McMansions and partially leveled future subdivisions left behind after the housing bust ever be completed? Some are even asking if home ownership is still part of the American dream. Out of all these questions, one of the most immediate is whether or not Millenials will be major players in the housing recovery. Gen Y is a big cohort, and has proved to be powerful game changers in the workplace. It stands to reason that their feelings about housing could have an equally large impact.
"The nation’s 80 million Echo Boomers, also known as generation Y (Gen Y) or millenials, represent more than 25 percent of the U.S. population. The sheer size of this generation indicates that “its impact on real estate and the economy in general will be as striking and long-lasting as that of the baby boomers,” says Leanne Lachman, Urban Land Institute (ULI) governor"
Urban Land also notes that Millennials want to live downtown near their friends and recreation options, in part due to their dedication to socialization and "civic minded" nature. They often prefer to live alone rather than with roommates, pushing the balance of affordability and the quality of interior finishes and design sense of the space. The article explains, "The researchers believe the majority of Echo Boomers will buy homes when they enter their 30s, but do not expect their preferences or attitudes to change much. The need for ample free time and connection to others is likely to influence Gen Y purchasing decisions when they actually buy, suggesting they will continue to prefer compact, walkable, urban communities close to transportation and work."
These trends aren't isolated to big cities like New York or Seattle but can be seen all over the country, even in Chattanooga. Here, neighborhoods favored by Gen Y have long been the ones they have helped transform, like North Chattanooga and the Southside. Close to downtown, restaurants, galleries, and with high concentrations of other Millennials, these neighborhoods feature a lot of rental properties, loft style condos, and small townhomes. Buildings like the Bread Factory Lofts, for example, are quite popular, and advertise many of the same features Urban Land pinpointed as Gen Y priorities, "This 1920's industrial building originally housed the Holsum Baking Company and is in the Southside Cowart Place neighborhood. The 27,000 square foot two-story structure contains Chattanooga's first true warehouse loft spaces with uses for residential and commercial. It features an interior atrium and a rooftop deck which provide quality views of surrounding mountains and the downtown skyline from any vantage point."
A few local twenty-somethings and UTC graduates confirmed the theory that as a whole, Millennials aren't thinking about buying homes just yet. Cal Tomkins, a 2011 graduate with a degree in nursing, said that he wouldn't think about buying a house until he was married and ready to settle down. Right now, he just doesn't make the money for a mortgage and isn't ready for the big commitment of real estate ownership. When he is ready, however, he knows just what he wants in a house, and it sounds a lot like what baby boomers traditionally favor. He wants a place far out in the country, isolated and quiet. Until then, he's pretty content in a downtown rental, an old house split up into apartments near the university, where he's been living since he was a student. Kathryn Olinger and Julia Hunter also stipulated marriage as the main contingency for buying a house. The consensus seems to be that there just isn't any point in buying a house by yourself-- it's just too expensive, too much commitment, and too hard to find a decent yet affordable place downtown where the action is. With so many Gen Y'ers delaying marriage while they finish school and get their careers started, it seems like buying a home will be another element of traditional adulthood that they wait on.
This shouldn't be surprising. Gen Y has been hard hit by the economy and is famously struggling to get on their feet. Jobs are hard to find after college, even jobs in retail or hospitality that they are overqualified for. This is the generation that moved back home in droves, unable to afford the expenses of living independently from their families. When rent is hard enough to scrape together, putting together the credit score and down payment necessary for a home purchase seems like a pie in the sky dream. What remains to be seen is whether this generation does indeed start purchasing homes later on, when they start entering their 30s, get better jobs or advance their now fledgling careers, and start considering marriage.