Team Taylor REMAX Southern Homes - February 2020

FEBRUARY 2020

205.979.8500 | WWW.MYNEWBIRMINGHAMHOME.COM

The Generational Differences of the Housing Market THE NEEDS OF YOUR MARKET

If you read our last article, you have a pretty good idea of what to expect from the housing market in 2020. In that newsletter, we mentioned some of the trends we’re seeing between the needs of the millennial and baby boomer generations. If you’re a millennial or baby boomer looking to sell your home, here is what you need to know about your target audiences. Less than 20 years ago, the baby boomer generation was building luxury homes tailored to their needs and interests. Now, faced with lifestyle changes like needing to be closer to family, they are looking to downsize into the move-up home market. The issue some baby boomers are facing is those tailored luxury homes don’t necessarily meet the needs of the millennial market. In a recent report from Nationwide Mortgage, it was found that the millennial market is looking toward modern, newly constructed homes. This is due to the market’s attempt to avoid costly renovations, plumbing, and electrical issues. Currently, crown molding and Tuscan-style architecture are being overlooked by millennials in favor of open floor plans and natural lighting. When looking at their housing options, millennials are also looking into lifestyle needs. The baby boomer generation is very community oriented. This trend is why we have seen such a high demand for the suburbs. Millennials are more focused on walkable areas to retail and other shopping outlets. The reason for the specificity in the needs of the millennial market is due to college demand, crazy enough. The millennial generation is paying off records amounts of college debt. According to the national reserve, in recent years, there has been 1.41 trillion dollars of outstanding student loan debt. What’s interesting is the comparison between the two generations and the affordability of the housing market. A recent Business Insider report states that millennials pay 39% more than baby boomers had in the 1980s.

“In 2000, baby boomers made up 43.5% of all homeowners. The percentage dropped only 1.5%, resulting in 42% ownership in 2010. Almost 10 years later, the percentage remains at 41% even though the oldest of baby boomers are approaching their mid-70s, an age well past the average age of retirement.”

Now, this isn’t exactly a new trend, but what it does tell us is baby boomers have the most significant amount of selling power. If a baby

boomer in the move-up home market did run their cost-benefit analysis in the last 15 years and found renovations a better value, they will find their investment paying off in the current housing market. On the flip side, what this could show us is the baby boomer move-up homeowner may have a demand for the luxury home of the baby boomer looking to downsize. This is all speculative, but it does show the value of running cost-benefit analysis when buying and renovating your home. We provide a free cost-benefit analysis for our clients to ensure they’re making the best investment possible.

If you have any questions, feel free to reach out anytime. Call us at 205-283-1602, or visit our website at DrewSells.com.

—Drew Taylor 205.283.1602 drew@taylorsold.com

When we look at the baby boomer generation, it’s fascinating to see their buying power. This is stated in a recent report by Harvard:

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