Posted on January 8, 2019 - 07:41 AM
by Donna Tripp
Lessons Learned: 10 New Demographic Trends 2019
Most of the anecdotal feedback we have received is that homeownership will go even lower than we forecast unless there is a massive shift in society
Isn't Change Inevitable...? Here are a few ways the 2019 housing market is changing:
People are increasingly living with strangers.
Inspired by Airbnb, numerous homeowners are bringing in unrelated housemates as a source of income, and not just for short-term stays.
Homeowners and renters are meeting online. Mature homeowners need the income (and perhaps even the companionship and help running errands), and young adults need lower rent (and perhaps even after-school care if they have a child). While this is a great market-based solution to an affordable housing problem, it has slowed household formations.
People are increasingly renting.
The forecast is that the homeownership rate will fall to 60.8 percent by 2025. Interestingly, now, though, it has been forecasted that homeownership will go even lower unless there is a massive shift in society, possibly induced by creative low down payment lending programs. Many people have shared that they have already sold their home and become renters because they 1) need the cash, 2) don’t use the mortgage interest deduction anymore, and 3) want to try living in another environment.
New homes being built for rent.
More and more people are renting homes. Until now it was never thought to be financially feasible to build new homes and rent them out. However, several companies have now done so and have shared that the yields in some markets are excellent. These builders and operators tend to have a long-term view toward building a steady, asset-backed cash flow stream.
Autonomous driving will change land planning as well as assisted living demand.
While fully autonomous driving seems many years away, planners and developers are already rethinking how new development needs to be planned with autonomous driving in mind. The percentage of people aged 20 to 24 with driver’s licenses has already fallen from 93 percent to 78 percent. Wow!
Assisted living facilities will grow less than people think if the elderly can use ride-sharing from home after losing their driver’s license.
Experiences are the new brag.
Possessions including houses and cars have historically been a status symbol. Today’s status symbol seems to have shifted toward experiences. Today’s “brag” is to show what you are doing on social media. The best house is more likely to be near great things to do rather than a large home with a large yard. This shift may best be represented by the attention given to a home’s walkability score. There are beliefs that the experience economy is behind the recent rise in divorce rates among those over 50 who want new experiences.
Frustrated senior executives. Experienced executives seem frustrated with the lack of growth in their own business, while younger management sees today’s growth as normal, and they are anxious to use technology to improve the business. Increasingly, executives born before the 1970s don’t want to change, and those born after 1980 are excited to change.
The baby boomer trends (such as the percentage of stay-at-home parents) clearly reversed around 2001.
9/11 was 16 years ago.
Many young decision- makers can’t relate to the social shifts that occurred after 9/11. It has been 16 years, and many of them were just kids at the time. What is (or was) "normal" to baby boomers differs from the "normal" for The Millennials, the largest home buyer population at this time.
Millennials (also known as Generation Y) are the generational demographic cohort following Generation X. There are no precise dates for when this cohort starts or ends; demographers and researchers typically use the early 1980s as starting birth years and the mid-1990s to early 2000s as ending birth years.
Cannot wait to see the housing evolution continue with the Generation Z homebuyers.
The mid-1990s to mid-2000s as starting birth years. There is little consensus regarding ending birth years.
Most of Generation Z have used the Internet since a young age and are comfortable with technology and social media.
Our future is ever changing. Embrace it. Grow with it. Understand it.
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