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Millennials seek smaller houses, but won't sacrifice details

Younger, first-time buyers demanding smaller, more affordable homes

As Millennials begin to enter the home buying market in larger numbers, homes will get a little smaller, laundry rooms will be essential and home technology will become increasingly prevalent.

This was the conclusion of panelists during an International Builders' Show press conference on home trends and Millennials' home preferences held last week.

Rose Quint, NAHB's assistant vice president of research, predicted that the growing numbers of first-time buyers will drive down home size in 2015.

Three million new jobs were created in 2014, 700,000 more than the previous year "and the most since 1999," Quint said.

At the same time, regulators have reduced down-payment requirements for first-time buyers from 5% to 3% and home prices have seen only moderate growth.

"All these events lead me to believe that more people will come into the market, and as younger, first-time buyers, they will demand smaller, more affordable homes," Quint said. "Builders will build whatever demand calls out for."

Quint also unveiled the results of two surveys: one asking home builders what features they are most likely to include in a typical new home this year, and one asking Millennials what features are most likely to affect their home buying decisions.

Of the Top 10 features mentioned by home builders, four have to do with energy efficiency: Low-E windows, Energy Star-rated appliances and windows and programmable thermostats. The top features: a master bedroom walk-in closet and a separate laundry room.

Least likely features include high-end outdoor kitchens with plumbing and appliances and two-story foyers and family rooms.

"Consumers don't like them anymore, so builders aren't going to build them," Quint said.

When NAHB asked Millennials what features fill their "most-wanted" shopping list, a separate laundry room clearly topped the list, with 55% responding that they just wouldn't buy a new home that didn't have one. Storage is also important, with linen closets, a walk-in pantry and garage storage making the Top 10, along with Energy Star certifications. In fact, this group is willing to pay 2-3% more for energy efficiency as long as they can see a return on their power bills.

If they can't quite afford that first home, respondents said they'd be happy to sacrifice extra finished space or drive a little farther to work, shops and schools, but are unwilling to compromise with less expensive materials.

A whopping 75% of this generation wants to live in single-family homes, and 66% of them prefer to live in the suburbs. Only 10% say they want to stay in the central city.

Compared to older generations, millennials are more likely to want to live downtown, but it's still a small minority share, Quint said.

Panelist Jill Waage, editorial director for home content at Better Homes and Gardens, discussed Millennials' emphasis on the importance of outdoor living and that generation's seamless use of technology, and how those two trends play into their home buying and home renovation decisions.

Because they generally don't have as much ready cash, or free time as do older home owners, Millennials seek less expensive, low-maintenance choices like a brightly painted front door, strings of garden lights, and landscaping that needs less watering and mowing, like succulent plants and larger patios.

They're also very comfortable with their smartphones and tablets, and increasingly seek ways to control their heating and air-conditioning and security and lighting as well as electronics like televisions and sound systems from their phones.

"They want to use their brains for other things, not for remembering whether they adjusted the heat or closed the garage door," Waage said.

Comments

7 people like this
Posted by Are ya listening ABAG?
a resident of Another Pleasanton neighborhood
on Jan 28, 2015 at 9:12 am


"....75% of this generation wants to live in single-family homes, and 66% of them prefer to live in the suburbs. Only 10% say they want to stay in the central city."

Yet, Pleasanton is forced by ABAG to build 'pack 'n stack' housing all over town, and Gov. Brown and the state keeps pushing for more and more 'pack 'n stack' "housing" (high-story apartment buildings) all across the state.

Depressing. Good luck, Millennials.


7 people like this
Posted by BobB
a resident of Another Pleasanton neighborhood
on Jan 28, 2015 at 9:23 am

Take these "conclusions of panelists" with a grain of salt. It was a panel of representatives National Association of Home Builders, and nothing more than home builder propaganda.

The "survey" was only taken among recent single family house buyers. Not a representative sample at all.


3 people like this
Posted by Ed
a resident of Pleasanton Meadows
on Jan 28, 2015 at 10:30 am

I agree with some of the comments -
I don't find it surprising that 75% want to live in a single family home. Wouldn't we all prefer a house to a condo regardless of when we were born?
The factor there is cost. Condos are a great way to get started as a homeowner but most want to move to an SFR eventually.

I can also understand that the low interest in yard maintenance. My 19 year old couldn't care less about a nice yard if it means upkeep. You should see his bedroom!


2 people like this
Posted by Joanne Berson
a resident of Bridle Creek
on Jan 28, 2015 at 12:31 pm

Speaking from a Bay Area perspective, working in California Real Estate since 1989, is that regardless what generation a home buyer considers themselves, most want or have learned that simplicity is critical. This translates into more homebuyers hoping to find smaller homes to create more time "for life, travel and work" outside of the home and more time for relaxation with the family in the home.


Like this comment
Posted by Ptowngal
a resident of Del Prado
on Jan 28, 2015 at 10:54 pm

Walk in pantry ?? In a smaller home the washer and dryer will be in the garage......if there is a garage. That walk in pantry still haunts me....I made my own walk-in pantry in my garage...thank goodness I have a garage..... Oh.....I forgot my car goes in there. I still like my small house..don't get me wrong...I just prefer bigger. I want that darn walk in pantry too. !


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