Just when everyone was starting to trumpet the amazing return of the entry-level property buyer after decades in which investors ignored that segment, another mind-bending recession kicks in. How will the economic recession associated with the COVID-19 pandemic affect property buying and renting trends among millennials?
To say that most millennials had a challenging time after graduation is somewhat an understatement. Many people who were 22 years in 2008, super-excited to begin their career and probably own a home, stepped into a collapsing economic system. Indeed, their fates seemed to be saying, “Just go home and live with your people.”
The Impact of COVID-19 Pandemic
Well, these individuals are now 34 years. It is the generation that has been accumulating savings and getting teed up to purchase and own properties. Before coronavirus pandemic, the economy was good, loans or mortgage rates were low, and many millennials seemed to be progressing with their careers. Then wham! Coronavirus hit the world hard. Record low unemployment rates turned into record-high layoffs in just a few days.
Actually, this conjures the image of Charlie Brown. Just when he was so determined to kick that football right through the goalposts, Lucy pulled it away.
Are millennials ready to go through a challenging life bracing for another economic recession and increasing layoffs? Previously, we were seeing apartments filled up with young people who had reliable means of acquiring properties but didn’t want to buy. Probably they opted to rent because of the flexibility associated with renting.
These individuals are more likely to retain that sentiment, and their perception may be further reinforced by the fact that the economic systems are changing. After all, no one wants to get caught owning property during a severe economic downdraft.
Just think about; millennials were just starting to get kids. This trend would have encouraged them to buy homes in a desirable neighborhood. There was also a trend happening towards single-family properties for rent. This trend allowed the growing, young families to enjoy the single-family living experience without having to worry about the risks of homeownership and hassles associated with the process.
According to most economic and political analysts, the chances are that birthrates are likely to be higher by December 2020. It is a humorous but real side effect of many couples being together during the coronavirus quarantine period. Adding to this is the expected surge of births that often follows the end of a chaotic period. This is precisely what happened after 9/11.
Post COVID-19 Property Markets
In a post-coronavirus world, there is a possibility of a further surge in the popularity of the single-family houses among millennial renters. Unlike most apartment buildings where many tenants are in closer contact and are forced to share elevators to get their apartments, a detached house allows for better social distancing. Right now, people are encouraged to practice social distancing. This could amplify the shift from apartment buildings to single-family homes.
In addition to having enough space for your kids, a detached house can accommodate your home office effectively. Previously, there were people who chose to work from home. However, the coronavirus pandemic is forcing people to work from home, and even when the disease is gone, the chances are that many people will continue to work from home.
Millennials will need enough space for dedicated, efficient, and comfortable home office. This will motivate many people to look for properties that are large enough to accommodate both family and home office. And it is the main reason many renters will choose single-family homes.
Millennials Will Reshape the Future Property Markets
In many surveys done a decade ago, many millennials interviewed that time used to say that they never want to live in the suburbs and initially revealed no interest in starting families. After the housing crash in 2008, millions of millions move in with their guardians and parents. This slowed down the formation of households.
Generation Y was a small part of the housing markets, but things are changing. Millennials now account for one-third of all house purchases. As mentioned earlier, older millennials (now in their late 30s) now have kids, and this increases the need to own a home or rent a single-family home.
Well, the transition of millennials out of their relative’s basements into a level where they now have families and own properties is a significant factor driving the overall demand for new houses countrywide.
So, millennials will continue to reshape the future of house markets. As much as the COVID-19 pandemic is impacting this industry, millennials are likely to adapt. For instance, they’re more likely to rent the single-family properties for a better living experience. Also, the need for a reliable home office space is another driving factor.