Generation Y is on the Hunt for a Home—and it isn’t Their Parents’ House

 

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, “Three Ways to Grab 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.

1. 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 too 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.

2. 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!

3. 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. 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 a 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.”

Melrose Place Apartment Courtyard

Melrose Place Apartment Courtyard (circa 2009)

 

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.

Time to Re-Evaluate

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!

The Monday Morning Meeting with Joanna Ellis is a monthly series examining the impact of Generation Y on the multifamily industry and discussing how to successfully do business with them.


Part 1: The Future Renter…What’s Next?
Part 2: Three Ways to Grab the Attention of Generation Y
Part 3: Getting to Know Your Generation Y Coworkers
Part 4: How Does Generation Y Perceive Your Green Initiative?
Part 5: Get the Inside Scoop on Generation Y with Our Summer Reading List
Part 6: Generation Y: A View from the Inside

 


President and Owner, Ellis Partners in Mystery Shopping

author photo two

Joanna Ellis is CEO and Owner of Ellis Partners in Management Solutions (EPMS) and Co-owner of Renter’s Voice. Under her direction, Ellis has established itself as the premier apartment mystery shopping company in the nation, as well as a respected provider of multi-touch point resident surveys, as part of their retention-focused customer experience program. Current clients include most major apartment developers, management companies, and REITs. Through Renter’s Voice, Ellis helps clients promote and respond to authentic and objective apartment reviews. Having earned a Bachelor of Arts in Business from Texas A&M, Ms. Ellis has spent more than 25 years in the multifamily industry, and she now holds both the Certified Apartment Manager (CAM) and Certified Apartment Property Supervisor (CAPS). She is also a licensed Texas Real Estate Agent. In honor of EPMS’ reputation for integrity, the Dallas Chapter of the Society of Financial Service Professionals awarded Joanna, on behalf of the company, the 2008 Greater Dallas Business Ethics Award for mid-size companies.

9 responses to “Generation Y is on the Hunt for a Home—and it isn’t Their Parents’ House”

  1. Interesting article. As a generation Y female, and recent college graduate, I can agree that when I saught a home last year, I looked for the three things listed above. I looked for a place primarily based on location – I wanted to be near the office, near a gym and not have to deal with traffic every day.

    Number two, most of my friends and myself are not looking for a “home,” we are looking for a place that will work until they reach the “next stage” in life so I definitely agree with number two (plus I chose to live right next to a park with running and biking trails, so pretty spot on).

    Number three- one thing I disagree with, smaller rooms. What I have seen with all of my peers renting selections is that we still want large bedrooms, and we will instead opt for a smaller kitchen/living room.

    Many recent college grads are coming from living at off campus dorms and apartments that have all of the latest amenities from a full swing golf simulator to competitive sand volleyball courts, that it is only natural for us to expect these things as we continue our life post-college…. or at least work hard enough until we can afford them. 🙂

  2. Michael Cunningham says:

    Audrey,

    Thank you for sharing your perspective and experiences. So the point about having plenty of living room space for home theater type set-up for TV, movies, and video games is not something you’ve seen? Do mobile devices replace those?

  3. I think generation Y renters would love to have those things, but we can either a) not afford them or b) are never really home so we don’t need them. Therefore we choose an apartment complex with those features making it convenient, no upkeep and luxorious like a hotel lobby.

    I think mobile devices have changed the time spent on PC’s, laptops and possibly just sitting still in a “living room” but I don’t think they have replaced those amenities. When gen. Y starts hunting for “homey” homes, which I still think will be in the city, opposed to suburbia, we will focus more on spacious living areas and kitchens.

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  6. Generation Y is on the Hunt for a Home—and it isn’t Their Parents’ House http://is.gd/qrYwEQ

  7. Generation Y is on the Hunt for a Home—and it isn’t Their Parents’ House | Property Management Insider http://ow.ly/5QaAg

  8. Understanding #GenY in the real estate market; three points on what they want and why http://t.co/HGz0hlz

  9. […] 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…read the original article […]

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