Downsizing is not just a reaction to the American real estate fiasco, it is the preferred way of life for Generation Y. Those born between 1980 and the early 2000s account for 80 million people and the demographic is known for bucking the McMansion trend favored by their forefathers and they are not alone.
Gen Y's Housing Vision
At the recent National Association of Home Builders conference, the housing preferences of Gen Y were the topic of several conversations. Some findings from the meetings include Gen Y favoring urban settings with 'walkability' and are more than happy to compromise on size to achieve that goal.
A couple of panel discussions at the conference were dedicated to the housing vision of Gen Y and overall, the housing future of this demographic is quite different from the vision of the American Dream of their parents. According to Melina Duggal, a principal with Orlando-based real estate adviser RCLCO, 88 percent of the age niche favor urban environments loaded with amenities and conducive to a pedestrian lifestyle (WSJ.com).
Most of the home design features surrounding Gen Y's housing vision are greatly influenced by technology. Rooms need to be designed with space for dining and playing in front of the television as activity based gaming portals require extra elbow room. Generation Y is more than happy to forgo living space in their dwelling as long as there are common areas including viewing rooms, fitness areas, swimming pools and outdoor space. Green living and conservative choices are in and the over-indulgence favored by their forefathers is long gone.
Factors Influencing Gen Y Housing Preferences
Regardless of the decade they were born in, this particular niche will vividly remember first hand the financial and emotional impact of the Great Recession on themselves, friends and family. As a result, they are willing to implement any strategy to prevent becoming a sad statistic in regards to foreclosure or abject poverty. Just like survivors of the Great Depression, the thinking and consumer behaviors of Gen Y have forever been altered.
At this point in time, employed Gen Y individuals consider themselves lucky and are taking precautionary moves to ensure that they do not make the same financial mistakes of the previous generation. As the recession kicked into high gear and wreaked havoc on income, savings and career potential Gen-Y has been especially hard hit by the changes. Bureau of Labor Statistics from 2010 have shown a national overall national unemployment rate around the 9.5 percent mark. Gen Y made up the bulk of these statistics and has experienced unsavory rates of over 15 percent.
As a result, the generation is cited with invoking conservative living choices and making due with less to have more security. Instead of biting off more than they can chew now, Gen Y is expected to slowly transition from renting to buying as a way to better control their budget. When they do, chances are they will buy a home based on their actual earnings, not a house they can grow into. Those factors have paved the way for the new housing ideal favored by the niche.
Downsizing New American Pastime
Until the recent recession, living in sprawling homes with a minimum of 3,000 square feet was the scenario of choice. However, that is no longer the case and research conducted by Trulia.com has indicated that 55 percent of Americans now favor homes with 1,401 to 2,600 square feet of space (Trulia.com). This attitude shift is being seen in every sector and demographic.
Famed heiress Candy Spelling recently downsized from the infamous 56,500 square foot "Manor" to a more conservatively 15,555 square foot condominium. McMansions once bustling with life now lay vacant and are available at significant discounts. Additionally, home construction trends include architectural plans for smaller spaces, proving that the industry acknowledges large homes are no longer chic.
