Prospects for urban multifamily properties are looking great, with the resurgence of downtown areas across the country. The Millennials, a generation of some 85 million representing 30% of the population, are reshaping the housing market by showing a strong preference for city apartment living.
America’s Urban Future
For nearly a century, America’s suburbs grew faster its cities. No longer are those distant environs of as much appeal. In fact, writing in the New York Times, author Vishaan Chakrabarti notes that:
"Once only a fraction of young college graduates wanted to move to cities; now about two-thirds do."
Multi-Family Market Update: Millennials = Generation Rent
Multifamily investing will be more lucrative than ever as millions of young people move out into the world...as renters.
A generation with more buying power than even the baby boomer generation comes with a fair share of reasons why renting makes sense. Apartment Broker Musing blog says a:
"tendency to stay in school longer, sizable student loan debt, lack of savings, low FICO scores, and delayed age of first marriage and having children are among the strongest factors pushing Millennials into apartment living durations that could last as long as twenty years."
Multifamily Real Estate Trend | Millennials are on the Move. Watch out, Multifamily, Here They Come!
For the multifamily investor, you need to know that this generation prefers to rent. According to Apartment Intelligence, part of it comes from the experiences of their parents, part from their own financial position:
"To understand the mindset of the Millennial, you have to put yourself in their shoes. Many are simply not very interested in buying a home any time soon. Most have seen their parents and other loved ones struggle to maintain their own properties while, despite the additional effort, those homes depreciate in value.
Most Millennials know that, because of their financial position, they would have a hard time qualifying for a traditional home loan and instead are avoiding the home buying process all together. Their minds are set on renting."
Come to the multifamily investment professionals at KerNors Capital Group. Up-to-date on all the latest market trends, certified green, 90 years of experience. Call today!