Among the many aftereffects of the popped housing bubble is the perception that a generation of young adults has been spooked into doubting that they’ll ever own a home — or even aspire to own one.
Not true, says a new survey from a major real estate company, which contends that 18- to 35-year-olds do indeed like the idea of owning homes, and they’ve learned a thing or two from watching their parents struggle with the housing market.
And by the way, that young adult child of yours, the one who has moved back home and established residence in your basement? He’s probably not a slacker — he just may be acting “strategically,” said Sherry Chris, president and CEO of the Better Homes & Gardens real estate brand. We talked about what her company gleaned about 20- and 30-somethings (in edited form):
Q: Why did your company recently survey a broad group of young adults, generally known as Generation X and Generation Y?
A: When you look at nationwide demographics, about a third of the population is baby boomers — that’s my generation. We’ve driven the economy for 30 years, and we’re starting to slow down our buying of real estate.
Another third of the population is echo boomers, which are a combination of Generations X and Y, and they’ll drive the economy for the next 30 years. It was important to find out what’s on their minds, because there’s been a lot of chatter about how they’re going to remain renters and don’t have a clue about home ownership. It was important for us to get this firsthand.
Q: So, are they gun-shy about real estate? What did they tell you?
A: What we found was the opposite of all the chatter and noise. This group of young adults is very much in tune with owning real estate. Their values are similar to their parents’. They don’t have any feeling of entitlement. They’re hard-working, and homeownership is important to them.
Nearly all of them said they were willing to adjust their lifestyles to save for a home. Sixty-two percent said they’d eat out less. Forty percent said they’d work a second job. And 23 percent said they’d move back home with their parents to save money — they’re being strategic about saving money to own a home.
They also said that all of the media coverage of the housing crisis has taught them the importance of doing their research and planning, and they think they’re more knowledgeable about the process than their parents were at their age. But they want to be ready to own — 69 percent said that someone is ready to buy if they can maintain their lifestyle (while owning), and 61 percent agreed that the “readiness indicator” is if they have a secure job.
I think this group is more cautious and conservative than we thought.
Q: Of course, confidence in the job market is no small indicator these days, which I think might slow their entry into the buying market, even if they want to buy. Then there’s the evidence of huge amounts of student debt they’re likely to be carrying. What did they say about student debt?
A: We didn’t get into that. Our survey was mainly to get the lay of the land as far as the Gen X and Gen Y potential buyers were concerned. We didn’t take a deeper dive than that.
I will say that earlier this year, we surveyed baby boomers to see if they had lent money for a down payment for their children or would do that. The results were pretty positive. There’s money available for these young people.
Q: What would you have done if young adults had said, “No, thanks, I think I’ll remain a renter”?
A: Well, as an industry and certainly as a brand, we’d have to step up our campaign to show young buyers the importance of real estate as a long-term investment and lifestyle.
On a related note, something else also drove us to do this survey: the big disconnect in the average age of a first-time buyer (36), versus the average age of a real estate agent (56). This younger generation of buyers’ habits are different — they’re comfortable using technology, especially mobile devices, to buy and track everything, and agents need to learn this.
They don’t go to a restaurant unless they go to Yelp.com (an online service for consumers to post their opinions about places to eat, shop, etc.) first.
One of our agents in California is a great example of this. She’s 36, and she gets one business lead a day from Yelp. Rather than asking clients to send her letters of recommendation, she asks them to post comments (about her performance) on Yelp. That’s a pretty powerful example (of how agents need to be changing).
Source: Chicago Tribune