With Millennials having trouble buying homes because of student debt and Baby Boomers unprepared financially for retirement, how is that going to effect the real estate investing market?
@Sally Fairchild Great question. I'm sure you will get lots of good thoughts on this. From what I've been reading and what I've heard in speaking with people about trends and shifts in millennials and gen z, there is a strong belief that multifamily properties will become even more sought out as the younger generation is starting to shy away from the traditional house in the suburbs lifestyle. Multifamily could mean many things: apartment, 2-4 unit, community housing etc. They also appear to be valuing closer amenities more than previous generations and actually want to live in the urban cores near restaurants, shopping etc and don't place as much value on yards, space etc.
However, there is also a belief that because of the student debt and the fact that the younger generation is getting married and having kids later, that once they do "settle down" they will likely desire a lot of the traditional things that suburbs have to offer and we just aren't seeing it yet because only the 1st half or so of millennials have reached that stage in life.
I think a lot of the hay that's being made about millennials being broke is overblown for most of the country. Statistically, yes, we buy fewer houses than previous generations. However, we still want comfort and stability like all those before us. I agree with @Scott Passman, we're just doing a lot of the typical things later in life. On average, we do want to in denser, more populated settings.
I do agree that a huge number of baby boomers do not have enough saved to retire when they want to. I'm hoping technology can step in and make some senior services more affordable.
I have seen it both ways with some millenials choosing to live for the now and have fun while they are young. And I have also met some millenials working towards paying off debt and saving for their first house.
I have met many baby boomers with little to no money in savings and those that are set pretty well for retirement.
If you invest smart, and in the right areas I don't think this really be a concern.
Kind of the same was said in 2008. Oh no all these people are losing houses you will never be able to rent them out. The complete opposite happened. The demand for rentals was huge! Many people gave up their homes voluntarily or sold them to get out from under it. Rentals aren't going anywhere. It's one thing to be in an area surrounded by many booming businesses, but quite another to have only 1 or 2 large employers in the area where if one employer closes it creates less opportunity.
This is a great question and I won't comment on the millennial trends but I can definitely add some insight into what some of the baby boomers are doing (here in CO at least). I work with several builders/investors who live in Pueblo West, CO. Pueblo West is extremely affordable relative to the rest of Colorado (Denver, Boulder, CO Springs have all become very pricey in recent years) and the number 1 client who buys my builders' homes are under-saved baby boomers coming from expensive markets looking for an affordable (and warm) place to retire. Baby boomers from California (we get more from CA then anywhere else), Denver, and other expensive areas all over the west coast are selling their homes and coming to Pueblo West where they can buy a house for 1/2 or 1/3 the cost of their old home and retire more comfortably.
What's happening in Pueblo West is indicative of what is happening all throughout the state. Under-saved baby boomers are leaving the expensive cities and moving to the more affordable rural towns (as long as there is access to healthcare) where they can retire very cheaply. Canon City, Florence and Pueblo West are just a few of the cities here that are drawing many baby boomers from around the country because they are affordable, have access to healthcare, and have a very dry/sunny/mild climate.
I would imagine that similar trends are taking place all over the country in that the under-saved baby boomers are moving to rural climates in warm areas where they can live cheaply and have access to affordable healthcare. I have a financial adviser friend who has been in the business 30+ years here in CO Springs and his main client base is baby boomers. He was just telling me that many of his clients are doing exactly what I just described, selling their homes in the city and moving to much cheaper rural areas to retire.
I'm from OH and my parents and many of their friends are under-saved baby boomers moving into retirement. I'm seeing the same trends with them as well.
You left out Gen-X does that mean Gen-X is cleaning up financially?
Many Boomers will probably end up on public assistance after the medical costs bleeds them dry of what they own (just like a lot of the elderly now). (Houses built of straw not bricks)
Millennial's will have a decent shot at things because the Economy (if it doesn't get reverted) is changing back to "Better Times" for working people.
Just my 2 cents...