(c) Neal Coleman, from the NPR article
[Continuing my experiment on short posts... 600 words or less, guaranteed.]
I’ve been sounding the alarm on the Millennials for… oh… over two years now, I guess, starting with this post in March of 2010. I noticed that even the mainstream media (like the LA Times) is starting to catch on to the fact that Millennials (or Gen-Y) are kinda screwed. I suggested then that the future of housing is Renter Nation.
Well, it seems that NPR has come around to noticing the phenomenon:
The Taylors aren’t alone. The economic hammer has fallen especially hard on 20somethings — part of the so-called Millennial Generation or Gen Y born roughly between 1975 and 1995. Plagued by high unemployment, many have had to delay careers, marriage and having children. And the idea of owning a home is more often being put off or written off entirely.
In a nation where homeownership is part of the American dream, a generation of renters could alter communities where they live and redefine the idea of middle-class success.
But, but… Rob, the American Dream is still very much alive! Survey after survey shows that the desire to own a home one day is still strong as ever. Which is why it’s so important for REALTORS(R) to focus on how to market to Gen-Y, and how to get with the technology program, and focus like a laser beam on having the latest iPad apps, the latest gadgets, and learning about the latest social networking trends. Pinterest is a valuable tool for REALTORS(r)!
Yeah, maybe. But then you have this wee little issue to confront:
The vast majority of Americans who currently rent say they hope to buy a place of their own someday, according to a recent survey released by the Woodrow Wilson International Center. But Newman fears that for many young adults, at least, perception and reality have yet to come face-to-face.
“The capacity to own a home will be powerfully affected by the slowdown in [their] earnings,” she says, “especially for entry-level workers and the crushing consequences of student loan debt.”
Speaking of student loan debt… have you even seen this chart?
NPR, of course, thinks the issue is about local governments. Fewer homeowners means less property tax receipts (see, e.g., Detroit):
“A question for local government leaders,” he [Rolf Pendall of Urban Institute] says, “is that if you have a generation that is less committed to taking a risk and buying property in that area, either because there are not jobs or because the overall national situation looks rocky, then as a local official, you absolutely have a problem for your long-term commitments, your long-term budget, your long-term obligations to such things as pension funds.”
The solution is obvious to Mr. Pendall:
But Pendall believes local governments will simply adjust to make rental properties “a larger share of the tax pie.”
Two things to think about from a real estate perspective.
1. If your marketing to Gen-Y does not include serving them as renters, does the rest of it matter all that much?
2. If local governments will look harder at rental properties for tax receipts, what might that mean for investors, the only people driving growth in the housing market?
And a followup third question to think about:
3. When NAR calls for a Rally to Protect the American Dream, and only 2.7% of its members show up at all, what member education topics should the Association focus on?
Yep, Instagram for REALTORS(R) is what I was thinking too.