By Marilyn Pribus –
Here’s an interesting statistic: The 2018 Home Buyer and Seller Generational Trends report, as researched by the National Association of Realtors®, shows about one-third of recent homebuyers are Millennials and about one-third are Baby Boomers. While these groups are at different places in their lives, it turns out they are looking for similar dwellings.
These people, born between 1980 and 1998, comprise 36 percent of recent home buyers. Nearly half have student loan debt and almost two-thirds are married, first-time homebuyers who view home ownership as a good financial investment. More than half of this group is likely to buy in the suburbs or a subdivision and the quality of the neighborhood and schools is particularly important.
Affordability, convenience to a job, entertainment, leisure and recreational activities are also important, so many are interested in urban or “close-in” living. Almost 90 percent buy a previously owned home while the rest opt for a new home to avoid renovations, replacements, or problems with older electrical, heating/cooling, or plumbing systems.
The study divided the Baby Boomer population into two groups. Younger boomers, born between 1955 and 1964, are most likely to buy a multi-generational home where they expect to stay for 20 years. They sometimes find their children moving back into the home after college to save money. At the same time, some choose to make a place for aging parents, sometimes with a “granny flat” or similar semi-independent apartment.
This group most often buys a home because of a job-related relocation, to be closer to friends and family, or to downsize. They generally buy fairly expensive homes in suburbs or even rural areas. While they are very sensitive to the energy costs of a house, they aren’t particularly concerned about the quality of local schools.
This contingent—born between 1946 and 1954—is often downsizing because the children are now fully fledged. They are also nearing or reaching retirement from full-time employment and close to 20 percent buy senior-related housing such as in an age-restricted development. They generally are able to choose when to sell a previous home and buy another.
They purchase homes for the quality of the neighborhood and convenience to friends and family. They are very interested in energy-efficient dwellings and appliances, but quality of schools isn’t important. This group sees this as their last home purchase and doesn’t expect to move again. Like millennials, they are often interested in urban options.
Since these Millennials and Baby Boomers are the largest groups of buyers in today’s real estate market, they heavily influence trends. Remember, however, these statistics are for the United States as a whole.
How about Charlottesville?
“Charlottesville is not your average town,” declares REALTOR® Rives Bailey, President of Montague, Miller & Co. “Charlottesville doesn’t necessarily follow national statistics demographically, employment-wise, and house-price-wise.” He notes that many people moving to the area are shocked to discover home prices are much higher than a typical small American city.
That being said, those same two very large groups have similar interests in our area. “It’s interesting,” Bailey continues, “they are looking for the same thing—particularly urban living—but for different reasons.”
He observes the millennials are just starting into the market. They have had housing fears after the market downturn, maybe they’ve lived with their parents and probably aren’t buying as early as their parents did. At the same time they are very social. “They like the urban style,” Bailey notes. “They like being close to restaurants and social activities, walkability and convenience and they don’t want to spend half their lives mowing their yards.”
Some Millennials must delay purchasing. Many, of course, are connected to the university and are here for a limited time so they will rent rather than buy. Others, with large student loans and other debts are forced into renting until they can afford to buy. Rather than buy a less expensive home “farther out,” they choose to rent in town to be near friends and activities and avoid long drives to get to work and to connect with their social life.
Boomers also find the urban lifestyle attractive. “In the 80s and 90s, this group often chose a rural lifestyle, but now they’re looking to downsize,” Bailey says. “They want to be close to the arts, healthcare, restaurants, and social groups.” They also like walkability and nearby access to shopping.
So we have these two large groups seeking urban living. “It’s really challenging to find what they want at a price they can pay,” reports Bailey, observing that pricing and availability limit the possibilities. He adds that Crozet is on the cusp of becoming considered urban.
“The resale market can’t supply the demand that exists in this area,” he says. “We need about 800 new units a year and we’re building about 600.” There just aren’t enough in the pipeline, either, he adds.
Looking for Green
“Smaller and greener has a lot to do with price,” Bailey explains, saying that both Millennials and Boomers are very interested in lower energy costs and protecting the planet. “The high cost of buildable close-in land dramatically affects the prices, so houses are smaller with good energy efficiency and lower maintenance costs.”
He points out that new houses—even lower-priced dwellings—are much more efficient in their construction with better insulation, better heating and cooling systems, and more efficient appliances.
Although Marilyn Pribus and her husband are in neither of these groups, when they moved from California they were looking for smaller and greener. They found it in a 10-year-old home with extra insulation, energy-efficient appliances, and mature trees to shade them in the summer.
“New houses are much more efficient in their construction and energy efficiency,” Bailey says. Even lower-priced new construction provides better insulation, better heating and cooling systems, and more efficient appliances.
Although Marilyn Pribus and her husband are in neither of these groups, when they moved from California they were looking for smaller and greener. And they found it here.