Millennials have been talked about ad nauseum —from what they’re eating and wearing, to where they want to live and what they want to buy. But this group, which outweighs GenX by nearly 40% and has recently surpassed the Boomers, is still worth talking about. They’re driving all aspects of our economy —and that includes the multifamily sector.
Here are some interesting stats on Millennials:
Millennials make up 31% of home buyers, and 12% of home sellers.
Millennials are less likely to be homeowners than young adults in previous generations.
College-educated Millennials have moved into urban areas faster than their less educated peers
Millennials care about eco-friendly, “smart” homes in close proximity to their jobs
Millennial hotspots like Austin, Texas are seeing increased action, particularly in apartment construction. One report projected that Austin would see 14,200 new apartments between 2015 and 2017, a roughly 7 percent increase in the number of multifamily units already on the market. Further, between 2010 and 2013, Austin saw the number of multifamily permits increase by 361 percent.
Austin is not the only second-tier city being impacted by millennial growth. This group is flocking to second-tier cities (Dallas, Houston, Seattle, Raleigh-Durham) where it’s cheaper to live and jobs are easier to find. The multifamily markets in these communities have seen improved fundamentals as a result.
What Does This Mean for CRE?
Not entirely new, the multifamily market has really focused on how to attract this group to their properties. Developers are studying trends and pain points, wants and needs, to stand out in the sea of properties that cater to this group. Larger units, storage, and highly amenitized buildings are becoming “par for the course.”
Whether you’re a multifamily property developer, listing agent, or broker, keeping up with the trends can help ensure your property is appealing to this ever-growing group. Here are a few trends to watch:
#1. Low Maintenance —By their nature, most multifamily units are relatively low maintenance, typically offering some type of HOA or building management that takes care of the overall upkeep of the property. Be sure to include this language in your marketing.
#2. Urban, Walkable Location —Millennials love urban, walkable locations that allow them to easily transition from life to work to play. How walkable is your community? Are grocery stores close by? Is there public transit around the corner? There are facts your millennial audience will be interested in.
#3. Luxury —Amenities are gold to this generation. From extra storage space to infinity pools, on-site dining, bike storage, concierge service, community gardens, WiFi, and more. Be sure to maximize the amenities to make your building stand out from the crowd.
#4. Green Living —Millennials are also concerned with green living. Energy-efficient complexes are becoming standard, so do what you can to get in on this trend. Solar, electric car charging stations, high performance energy monitoring and controls, and more will help keep the building green, energy costs low, and tenants happy.
As the millennial generation —and others— continue to grow, keeping abreast of changes in demands and preferences is paramount to the success of any multifamily project. What are some of the trends you’re spotting in your community?