Have We Lost An Entire Generation of Home Buyers?
I worry a lot.
This meltdown, crash, near depression or (insert your own apocalyptic adjective here) of our economy has got me wondering about the Y generation (you may call them millenials or echo boomers). I've been thinking for some time about the whole concept of our disposable society and the speed of change as it relates to home ownership. It has seemed to me that more and more there's a group of people out there who aspire less to have roots then to have an exit strategy.
It hit me in 2007 when I took a trip to Palo Alto to be a part of a California company's relocation to the Indianapolis area. I was a part of their town hall meeting when they were trying to emphasize the positives of their plant moving several thousand miles east. While one of the positives of the move was certainly housing affordability (Palo Alto is a rather ritzy end of the planet to call home compared to Indy), a number of the attendees were non plused. Yes, there was a lot of angst given that their lives were going to be uprooted. Yet, it was more than that. I got the sense from a number of their best and brightest that owning a home versus renting anywhere was an absolute 'who cares.' It wasn't that they didn't have motivation given the astronomical rent most of these people were paying to share a flat and a bathroom with several absolute strangers in their area. You would think that owning your own 1700 square foot home for HALF of what they were paying to rent with room mates would have appealed to them. It seemed that a number of them were simply not interested. These were bright , aggressive people many among them engineers and other highly educated professionals who had no predisposition other than owning a home was not a priority.
While that trip may have been the starting point, it's been out there a great deal lately and perhaps we 30 and 40 somethings are at least partly to blame. Our culture is more and more of the mindset that walking away from things when they wear out our interest. It's the norm rather than the exception. Spouses, jobs, personal property, economic responsibilities, pets - you name it. Any more if people are tired of it, out it goes. It seems that many of our current young adult generation has just skipped the middle man and decided to keep the fewest roots possible, just in case they get fatigued, like they do with the latest Wii game, with their surroundings.
The home ownership roller coaster started about the time the century turned. Getting a mortgage became like eating at a fast food joint. Place your order, drive around and voila! You're a home owner! Now the tide will flow at an even faster ebb away from ownership. That mindset may increase because we have raised an entire generation of people to dispose of anything they're tired of coupled with the fact that until recently they didn't need savings, a down payment or even significant job stability to buy property. This new world of home ownership is a recipe for a huge cultural, economic change away from said ownership.
Does this generation have the discipline, motivation or even the interest to get back to the future by changing it's ways and actually saving for a house as credit gets cranked down? Will they put off the flat screen TV and latest hot car long enough to think about owning real estate?
Fifteen and twenty percent down payments are a big commit from anyone...let alone a generation that's never really had to make that choice. In the end they ultimately may no longer be interested in doing so.
Questions? Comments? Donations? Greg@GregCooper.com or 317.848.GREG (4734)