econintersect.com
       
  

FREE NEWSLETTER: Econintersect sends a nightly newsletter highlighting news events of the day, and providing a summary of new articles posted on the website. Econintersect will not sell or pass your email address to others per our privacy policy. You can cancel this subscription at any time by selecting the unsubscribing link in the footer of each email.



posted on 05 February 2017

Household Formation, Multigenerational Households And Millennials

by Diana Hill, Online Trading Academy

Special Report from Online Trading Academy

When talking about real estate, whether it’s commercial property, rental property or residential, we don’t always think of it from a demographic perspective. Demographics and housing trends are exceptionally important. They help us identify what the current market is doing and help us project the future market trends. Helping investors stay ahead of the cycle.

house.sold.380x200

Household formation

The number one statistic that is used to predict real estate growth or shrinkage is household formation. As you can see by the chart below, household formation was at a peak in late 2004 through mid-2005 and at its lowest at the end of 2008. Household formation is the reflection of how many new people are creating households. For example: in 2004 when the economy was strong, say 4 young people graduated from college and they all went and rented one-bedroom apartments, they just formed four new households. This is the creation of household formation.

When the recession hit, those same four young people found that they could no longer afford their one-bedroom apartment and chose to group together and get one house with four bedrooms, forming one household. Four households became one household, creating household shrinkage.

Chart of household formation over time and what we can expect for the future.

One of the other changes that we’re seeing in household formation is the change from a traditional family structure to a multi-generational structure. There is a record number of Americans living in multi-generational households. A record 60.6 million!

Statistics show that more people are living in multigenerational housing.

Multi-generational households have almost doubled in the last 65 years. This is an important trend to note for real estate investors such as fix & flippers and builders. It’s not simply larger houses that these multi-generational households are looking for, its co-living options such as: in-laws quarters, guesthouses and above garage apartments just to name a few.

The next demographic to consider when looking at household formation has to be the millennial’s. There are about 80 million young adults that were born between 1978 and 1995. That represents approximately 25% of the population. Not only do millennial’s make up the largest household formation base, they also have different wants, needs and expectations than their baby booming parents. Let’s look at a few things that make them unique:

  • don’t want to be tied down

  • they’d rather not live in suburbia

  • they want to live near work and not commute

  • they want to live near where they “play"

  • many telecommute, full or part-time

  • they are delaying marriage and family until later

  • technology is like air to them

  • many don’t own or want to own cars

  • travel and hobbies are important to them

Another big difference with millennial’s is they feel they have the tools to do the research themselves. Value is very important to them and they want to make sure they are getting the best value. What they consider value does not always correlate directly to low prices. When they do move into the buying phase, not only will they look for value they also don’t want to be house poor.

Our job as real estate investors is to stay in front of the cycle. I personally see the next 5 to 10 years as a great opportunity to take advantage of the multi-generational households.

Great Fortune,

Diana D. Hill - diana@otarealestate.com

>>>>> Scroll down to view and make comments <<<<<<

Click here for Historical Investing Post Listing










Make a Comment

Econintersect wants your comments, data and opinion on the articles posted. You can also comment using Facebook directly using he comment block below.




Econintersect Investing


search_box

Print this page or create a PDF file of this page
Print Friendly and PDF


The growing use of ad blocking software is creating a shortfall in covering our fixed expenses. Please consider a donation to Econintersect to allow continuing output of quality and balanced financial and economic news and analysis.


Take a look at what is going on inside of Econintersect.com
Main Home
Analysis Blog
Men Without Work
Slow Economic Growth Will Be Around For A Long Time
News Blog
Crumbling Comet? The Great Debate About Whether Rosetta Rock 67P Is Breaking Apart
ISIS: Income Has More Than Halved Since 2014
What We Read Today 29 March 2017
The Best Hilarious Prank Ideas For April Fools' Day
February 2017 Pending Home Sales Index Improves?
The Need For Very Low Interest Rates In An Era Of Subdued Investment Spending
America's Missing Workers Are Primarily Middle Educated
The Share Of American Women In The Labor Force Is Slipping Even As It Rises In The Rest Of The Developed World
Infographic Of The Day: Which Countries Are Going In The Right Direction
Early Headlines: Asia Stocks Mixed, Dollar, Oil Up, Gold Down, Article 50 Day, Westinghouse Files Ch. 11, Trump Wants $1B To Start Wall, Russian Protests, China's $8T Shaky Debt, And More
Thirty Plus Terror Suspects And Convicts Not A Rare Occurrence In UK
The Winners And Losers In Trump's Proposed Budget
God and America (Version 3)
Investing Blog
Investing.com Technical Summary 28 March 2017
The Dollar's Coming Impact On Markets
Opinion Blog
Free Immigration Is The Moderate, Common-Sense Position
Macron May Lead But Le Pen Remains The Big Story
Precious Metals Blog
These Gold Stocks Will Produce Much Bigger Gains Than Gold Itself
Live Markets
29Mar2017 Market Close: DOW Closes Down 42 Points, SP 500 Up At Close, Nasdaq Clearly The Winner Closing Up 0.4 Percent, Wall Street Investors Happy
Amazon Books & More






.... and keep up with economic news using our dynamic economic newspapers with the largest international coverage on the internet
Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government































 navigate econintersect.com

Blogs

Analysis Blog
News Blog
Investing Blog
Opinion Blog
Precious Metals Blog
Markets Blog
Video of the Day
Weather

Newspapers

Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government
     

RSS Feeds / Social Media

Combined Econintersect Feed
Google+
Facebook
Twitter
Digg

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution

Contact

About

  Top Economics Site

Investing.com Contributor TalkMarkets Contributor Finance Blogs Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2017 Econintersect LLC - all rights reserved