Housing is changing due to several factors….affordability, demographics and lifestyle changes by those demographics. What I'm seeing is two distinct ends of the demographics reacting in a similar way but for different reasons. The older baby boomers - this in their 50's and beyond are downsizing and simplifying. They were the megaconsumers during the 80's, 90's and 2000's and rode the ups and downs of the booms and busts of that time frame. Then there are the children of the baby boomers, the Millenniums who virtually watched all of this and have reacted in the total opposite way by not buying and not costuming.
By the time the Babyboomers hit their mid twenties and thirties they had first and some second homes, cars, cars and more cars and of course furniture and things to fill the plethora of mini storage places we all have our "stuff" in. The Millenniums on the other hand are not buying, they are renting, some are refusing to even buy a car and instead are choosing to live in urban areas where they can walk or bike to everything, and then they are buying furniture from second hand stores and repurposing all the "stuff" that is being given away by the Downsizers!
Hence, the blog of October 28th by Josh Miller on the National Association of Home Builders noted that homeownership rate hit a 20 year low! After hitting a peak in 2004 and 2005 it has steadily declined to now in 2014 we are where we were in 1994. We see a lot of Baby Boomers buying older homes and either tearing them down and building smaller but nicer or simply remodeling. Many are renting due to tight credit and never bouncing back from the lost equity of the Great Recession. Millenniums have not been able to get the decent jobs to buy houses so many on both ends of the demographic spectrum are renting! Rental vacancy rates are at 7.4% and not this low since 1995…..see the parallel data from the homeownership bottom of 1994. Hence, our multifamily work has been booming. We are doing a ton of repurposing of old properties - all over the country! Rents are rising and perhaps that combined with easing credit may be the tipping point for the millenniums - add to the fact they will be hitting their thirties soon and perhaps finally getting decent jobs and settling down???? I don't know - I think this generation is different we will see.
So what is my conclusion….? I see the Babyboomers continue their downsizing and slow down in purchasing big ticket items, not so many second homes, but what they do buy and build will have all the bells and whistles of their mega mansions from the last decade… we are definitely seeing that. I see Babyboomers urbanizing and living in areas where shopping, dining and if they are still working - it is all right there! Same with the Milleniums - they want to be where the action is. They don't need or want a big footprint and want their space techno friendly combined with reclaimed and repurposed materials and items.
What do you get when you mix both ends of the demographic spectrum together - Transitional Style. The aging Babyboomers want to ditch the dark and heavy Tuscan / Old World for the hipper contemporary feel and style without going too far or too trendy or too cold and sterile. The Milleniums want minimalistic, airy, non-consumptional space and furnishings with reclaimed and repurposed elements infused in high tech and contemporary spaces. Both ends of the spectrum are arriving in the same part of town and searching for pretty close to the same look. The Babyboomers want more bells and whistles in a smaller package as I mentioned before…..wine cellars, morning bars, tricked out offices and media rooms; but they now want to be closer to the action.