For all the speculation about what aspiring Millennial homeowners will do over the course of the next several years, the surprising push for Boomers towards the same urban cores associated with those pesky youngsters is perhaps the more interesting story. And while many investors for decades prior put their chips on resort and retirement communities along the Sunbelt--anticipating a retirement push for Boomers looking to golf and laze through their later years--those investments are now considered by Emerging Trends as "the least desirable investment and development properties." After leading the push towards more far flung suburban communities for much of their lives, more Boomers are trading empty nest properties for apartments and condos nearer their jobs in cities and transit-accessed inner-ring suburbs.
Adding Boomers to the supposedly-Millennial new urbanist pot makes for an interesting prospect, as they are statistically the most affluent demographic with more available capital than younger groups. Combined, Millennials and Boomers represent two major population booms with upwards of 160 million people total. The coalescing of these two groups and how they trend may be among the most important real estate trends for investors and homeowners alike in the coming years. While many argue that the priorities of the two groups are not culturally in sync, where their interests connect is an economic powerhouse in the making.
Why were investors so wrong about Boomers? What about cities appeals to them now? Several differences exist between Boomers and their parents in the Greatest generation that make city living seem sensible. In many cases, Boomers are staying healthier longer and often still working later into their sixties. Quite a few, thanks to difficulties in the economic crisis of the last decade combined with longer life expectancy, are not financially in a position to retire yet. Moving to a city offers them the opportunity to downsize their expenses and be closer to work.
Moreover, many others who are approaching retirement buy or rent in the city and have their primary residence set at a vacation spot somewhere tax friendly to minimize costs. This speaks to a different understanding of retirement: one that prioritizes proximity to energy, culture, and people of different ages. Many boomers want the opportunity to live easier with smaller houses and less upkeep than suburban homes, without fully giving themselves over to the status of a "retiree." Furthermore, after years of SUV-centric carbon intensive suburbanite living, many are coming around to the appeal of living a smaller and greener life>
With a larger number of Boomers moving into hip urban cores and Millennials aging their into child-rearing years, a big question is whether or not the younger generation will stay in the city. While Americans of all ages trend towards moving towards less density, into suburbs or smaller cities, Millennials do so at a considerably lower rate than their older counterparts. Statistics show that they want to purchase real estate--something they are quickly seeing as an impossibility in major cities, where home prices are appreciating at a much higher rate than wages can keep pace. While a considerable push towards giving a new urbanist makeover to popular inner-ring suburbs, many Millennials cherish a lot of things that the majority of suburbs and exurbs cant offer--functional transit, walkability, access. At this point, the outcome is a toss up as conflicting reports show Millennials moving into and away from urban centers. With these two major groups in flux, the coming years will be very important for both the look and feel of urban cores, as well as the long term growth and health of American suburbia.
| Based in Los Angeles, CA, Nicholas Brown has been writing since 2008. He holds a Master of Arts in English from Northeastern University. His professional interests include sustainable living, personal finance, real estate and investment trends. He writes for JustRentToOwn.com. |
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