As if it weren’t hard enough being a millennial (lower wages relative to other generations, student loan debt, highly tight and rapidly changing job market, etc.), some prognosticators say there is an impending, chronic housing shortage that will likely hit millennials the hardest. They also say that this impending and chronic housing crisis will coincide with “the great senior sell off” by baby boomers that will especially affect houses in the suburbs.
We have all been wrong about the majority of millennials preferring city life and a more shared, urban environment. “Only 25% of millennials do,” says professor Arthur C. Nelson at the University of Arizona. What millennials want is homes and suburbs to be structured differently than they have been for previous generation. They want less square footage, walkable suburbs and more sustainable environments.
Unfortunately, baby boomers are holding onto the suburban homes millennials may want in hopes that home prices will rise enough to ensure their comfortable retirements. By the time the boomers do sell their homes and “the great senior sell off” goes into full swing, it will likely be the mid 2020’s. In the meantime, developers and investors are not building the affordable, more compact homes in the suburbs that cater to sharing lifestyles are not being built. Millennials have no boomer homes and no new homes available to them to buy even if they could afford a 20% down payment and 30% of their monthly income on housing costs.
So, what to do? Move from San Francisco, Los Angeles, Miami or New York to more affordable Orlando, Austin, or San Antonio. Buy a condominium or small, older home in a rundown area without a quality school where you don’t have the time nor the money to fix it up. Stay in an apartment, delay partnering up, delay starting a family. Persuade a baby boomer to trade housing with you so they can get rid of their mortgage, property taxes, home maintenance responsibilities and you can get a more spacious home so you can partner up and start a family, a yard so you can have some green space and a dog and you can get out of that concrete jungle.
Whew! Crisis averted.