For Generation Y (Gen Y), the sons and daughters of the Boomers, conceptions of the home are changing. According to survey data recently presented at the National Association of Homebuilders conference, the progeny of the Baby Boomers constitute a significant bulge in the population of first-time homebuyers and their preferences for housing are dramatically different from those of their forbearers.
The survey shows Gen Y is less attracted to the suburban sprawl of unquenchable lawns, formal living rooms and clone-like housing tracts that were so highly esteemed by their parents. Rather, Gen Y seeks functionality and practicality in their outdoor and indoor living spaces alike.
Instead of spending their Sunday afternoons mowing down their half-acre yards, Gen Y-ers would prefer an outdoor space designed for intimate gatherings and requiring little maintenance. Gone is the desire for living space that sits untouched, crowded with plastic-draped furniture still pristine from little or no use. The next generation of homeowners and renters only need enough space to satisfy daily use, which typically means one multipurpose room, sufficient for dining, visiting and relaxing in front of the TV with a laptop.
In addition to smaller, more manageable living space of the single family residence (SFR) variety, the survey revealed a desire for urban, multi-family housing developments with substantial amenities located in shared spaces. [For more information regarding Generation Y renters, see the November 2010 first tuesday article, Generation Y is still chasing their dream of homeownership, the October 2010 first tuesday article, The demographics forging California’s real estate market: a study of forthcoming trends and opportunities — Part I and Part II and the February 2011 first tuesday article, New tactics for competitive renting.]
first tuesday take: Baby Boomers did not ask for the suburban paradise they eventually inhabited en masse in the late 1960s and early 1970s. The four-bedroom, two-bath, half-acre dream home, at least 30 miles distance from the city, was an ideal inculcated by their parents — the so-called Greatest Generation.
The vehement backlash against suburbanism of the 1980s percolated out of a profound disappointment in the trajectory of American culture. Many Boomers realized the bitter irony that millions of reformed socialists and hippies were now living in the neatly carved niche of the suburban middle-class, and they seemed happy about it.
A particular level of consciousness was attained in the 1980s. What was once an isolated disdain for the suburban middle-class on behalf of subterranean counter cultures became a pervasive (if unspoken) kind of self loathing experienced by many Baby Boomers. Now broadened into a persistent discontent at the failure to effect political change in the late 1960s and their subsequent sell-out to corporate America in the jobs they accepted, the reimagining of the American Dream began to take place in the heart of the suburbs.
It is becoming widely known amongst real estate professionals that Gen Y is searching for a lifestyle that diverges from the status quo experienced by their parents. What is not so widely understood is the reason why, and the greater implications of this new paradigm in housing markets.
Gen Y has been inculcated by their Baby Boomer parents, who many believe are still happy to trade-up to larger homes and buy McMansions, to desire more manageable living space closer to metropolitan cultural centers. Just as the Greatest Generation shaped the dream of homeownership for their post-war children, Boomers have shaped the new real estate paradigm that Gen Y is now enacting.
The greater implications of this perspective on the genealogy of the real estate market profoundly affect real estate agents and brokers in their approach to the new real estate paradigm. Since Baby Boomers are responsible for the shift in Gen Y’s approach to housing, it follows that those Boomers who have retained the means for mobility (read: the ability to retire and sell their suburban home) will want to realize their own dreams, rather than experience them vicariously through their sons and daughters.
Thus, there is potential for a great confluence of renters, comprised of the two most populous generations in existence today. As Boomers with their vast numbers commence retirement, they will likely follow the younger members of their family to city centers with warmer climates, behavior already consistent with retirees but rendered more likely due to the historical and cultural factors discussed above. [For more information on rentals in California, see the July 2010 first tuesday article, Rentals: the future of real estate in California?]
Whether or not the Gen-Y and Baby Boomers’ desire for a lighter, more efficient and mobile lifestyle is realized depends on many factors. Although California’s real estate professionals would undoubtedly do well to keep a close eye on the rental market and a finger on the pulse of Gen Y, it remains to be seen if the federal government will modify its long-standing housing policy to conform to the needs of the next generation or if they will continue pushing the traditional model of the American dream as homeownership in an ever-expanding frontier into forests and farmlands. [For more information on the federal government’s efforts to push homeownership, see the December 2010 first tuesday article, The mortgage interest tax deduction imbroglio — the squabble continues.]
Re: “New generation of homebuyers have new idea about ‘home’” from the San Francisco Chronicle