Nearly half of all renters are former homeowners. This percentage continues to grow despite record low home prices.
2012 2013 TODAY
33.6% 35.1%44.1%
6 of 10people would sacrifice a bigger house
to live in a neighborhood that features a mix of residences, stores and businesses.
Millennials tend to place more value on amenities than on square footage.
Some Desirable Amenities Include…✓ Wi-Fi Connectivity ✓ Communal Spaces ✓ Walkable Locations ✓ High-End Fitness Center
This is a generation of online social networking and herding—or meeting at a social gathering in a moment’s notice.
Hey! We’re meeting at Starbucks in 5 mins.Want to join?
Sure! See you soon!
Millennials’ attitudes toward homeownership has changed because of the housing crisis and recession in the mid-2000s.
Many saw their parents lose a significant portion of their savings due to decreased home prices and have since lost confidence that homeownership is the way to develop wealth.
HOUSEFORECLOSED
The “Bank of Mom and Dad” is closed. Since their parents must rebuild their retirement portfolios, millennials are not getting the same down payment assistance that the generation before them received.
In addition, many 25- to 34-year-olds have taken on consumer and educational debt and are now unable to qualify for a mortgage.
Federal student loans outstanding have shot up 360% since the start of the recession, rising from $98 billion to $453 billion in just four years.
2007 2008 2009 2010
$98B
$453B
Rentership rates for households aged 30-64 are the highest they’ve been in 30 years.
Particularly among households in their thirties,
which is up by more than 9 percent in 8 years.
They are also baby boomers who are trading in their single-family suburban homes to be closer to urban centers.
Look at the average person interested in renting at Haven, a luxury rental community at Avalon, a $600 million mixed-use development in Alpharetta, GA opening October 2014…
5%
29%
34%
23%
8%
51-65 26-35
Under 2566+
Interested Renters
by age
The majority of interested renters are between 36and 65 years old.
36-50
The majority of interested renters have an average salary of $100,000. 18%
17%
14%28%
23%
Interested Renters by annual
income
No Answer$40K - $75K
$76K - $125K
$126K - $199K
$200K+
In many cases, people are abandoning “The American Dream” of homeownership and choosing luxury rentals because it’s more walkable and accessible to desirable amenities that high-end mixed-use developments offer.RICHARD MUNGER
PARTNER AND V.P. OF DEVELOPMENT
NORTH AMERICAN PROPERTIES
The rental economy is part of a growing post-recession movement to value experiences over possessions.CLAIRE CAIN MILLERTHE NEW YORK TIMES
AVERAGE APT.
SAN JOSE, CA
MISORA AT
SANTANA ROW
Studio
$905Studio
$1,775425 square feet500 square feet
As walkability increases in a community, so does property value.
$300per
month to apt.rents
$82per sq. ft. to
homevalues
$9per sq. ft. to
office rents
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$7per sq. ft. to retail rents
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Size of new apartments in
U.S. fell to lowest square footage
since 2002, as leasing continues
to grow moreexpensive
square feet1,043
Apartments are shrinking because when you live in a mixed-use community, what’s outside becomes an extension of your livable space. This is why developments like The Grove and Pike & Rose are achieving higher rents and higher occupancies.
MARK TORO
MANAGING PARTNER
NORTH AMERICAN PROPERTIES
Developers are optimistic this trend will continue, as multifamily starts have seen double-digit growth over the last few years to meet demand for rental units.
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Set Your Site in Greater Philadelphia by Jerome Rozen (image)Friends having fun outdoors by Svetlana Damjanac / iStock.com (image)Smartphone designed by George Agpoon / The Noun Project (icon) Footprint designed by Jule Steffen & Matthias Schmidt / The Noun Project (icon) City designed by Nicholas Menghini / The Noun Project (icon)Crowd of People Walking on the Street by Rafael Ramirez Lee / Shutterstock.com (image)Receiver by Sergey Krivoy / The Noun Project (icon)Coffee by Sam Ahmed / The Noun Project (icon)Car by Laura Beggs from The Noun Project (icon)Martini Glass by Stanislav Levin / The Noun Project (icon)Shopping Bag by Erin Standley from The Noun ProjectDumbbell by Ola Möller from The Noun ProjectMortar Board by Paul Souders from The Noun ProjectAnchor designed by Jeremy Elder / The Noun Project (icon)Airplane designed by misirlou / The Noun Project (icon)Pike and Rose Groundbreaking by Maryland GovPics / Flickr (image)Santana Row by Bruno Pinheiro / Flickr (image)The Grove in Los Angeles, from above, no. 12052203 by Eric E. Johnson / Flickr (image)The McMansion by Dean Terry / Flickr (image)Thumbs Up designed by Alv Jørgen Bovolden / The Noun Project (icon)US Open Parking Lot by alex92287 / Flickr (image)
Caulking window by kimkole / iStock.com (image)Cookie Cutter Houses by Ann Walsh / Flickr (image)Santana Row by Eric Fredericks / Flickr (image)Reception Bell designed by Catia Marsh Mallow / The Noun Project (icon) Footprint designed by Jule Steffen & Matthias Schmidt / The Noun Project (icon) City designed by Nicholas Menghini / The Noun Project (icon) Wireless designed by Edward Boatman / The Noun Project (icon)The Americana at Brand by Chris Yarzab / Flickr (image)
IMAGE SOURCES
Axiometrics | axiometrics.com/company/pressreleases/apartment-occupancy-hits-95Survey by Apartments.com | realestateeconomywatch.com/2014/01/nearly-half-of-all-renters-are-ex-homeowners/Survey by Trulia | magazine.good.is/articles/most-americans-want-a-walkable-neighborhood-not-a-big-houseNational Multi Housing Council (NMHC) | finance.yahoo.com/news/landmark-resident-survey-identifies-top-173400335.htmlNational Association of Realtors | realtor.org/articles/how-millennials-move-the-car-less-trendsU.S. Census Bureau | tampabay.com/news/business/realestate/pricey-posh-tiny-apartments-rule-tampa-bays-big-money-rental-boom/2189650 Urban Land Magazine | urbanland.uli.org/infrastructure-transit/housing-america-s-graying-population/ Harvard Joint Center for Housing Studies | harvard-cga.maps.arcgis.com/apps/StorytellingTextLegend/index.html?appid=7e85ff667f804fe0aaf10a5a27db9c39Hart Research | macfound.org/media/files/How_Housing_Matters_2014_FINAL_REPORT.pdfRent Comparison (San Jose, CA) | forrent.com/apartment-community-profile/1000059389.phpRent Comparison (Alpharetta, GA) | apartmentguide.com/apartments/Georgia/Alpharetta/The-Lex/259/Study by Brookings Institution | nytimes.com/2012/05/27/opinion/sunday/now-coveted-a-walkable-convenient-place.html?_r=1&U.S. Census Bureau | census.gov/construction/chars/pdf/mfu_medavgsqft.pdfU.S. Commerce Department | bloomberg.com/news/2014-07-10/renters-trading-size-for-frills-fuel-u-s-apartment-boom.html
http://www.nytimes.com/2014/08/30/upshot/is-owning-overrated-the-rental- economy-rises.html?_r=0
DATA SOURCES