August 27 2015
Self-confession: I love surveys. Data is my kryptonite. I got hooked in my grad school stats class and I've never looked back.
At Great Western Bank, I created the Realty Confidence Index, which surveyed, face-to-face, broker-owners in 23 states. At Fannie Mae, I got to pitch to reporters nationwide the most comprehensive housing surveys of its day. At Imprev, I helped craft and launch the real estate industry's first Thought Leader Survey and continue to spearhead that effort.
This all means I know intimately what Mark Twain meant when he popularized the saying, "There are lies, damn lies and statistics." Two people can draw completely different conclusions from the exact same data.
Which is why I am having problems with a few statistics about Millennials and their immediate impact on home buying:
The problem I am trying to reconcile is that there are many other statistics that seem to contradict the notion that Millennials are going to drive the housing market, including the numbers below, from a blog ("Millennial Marketing Madness") I wrote last November with statistics provided by economist Elliott Eisenberg:
Add in these statistics from the TD Bank survey that touts how Millennials are going to "own" the housing market in the next two years:
And then there are these statistics:
I have a theory that reconciles most of these statistics: Millennials are turning to their Baby Boomer parents who are buying the homes for their kids or helping their kids buy a home. If this is really what's happening, it's important to realize that the real decision makers are NOT the Millennials but the Boomer parents: They will be calling the shots and those are the folks that real estate professionals really need to be considering in their marketing to Millennials: Boomers will continue to be the real drivers in housing marketing for many years to come.
Which brings me to the biggest conundrum of Millennials and Boomers and buying houses: Even if Millennials can afford to buy a home, what homes are they going to buy?
Recently at a NAREE conference in Miami, experts pointed out an interesting fact: Millennials don't want McMansions. But that is the housing property Boomers are about to vacate – in droves – as more and more become empty nesters (albeit delayed because so many Millennials are having to live back at home with Mom and Dad), they want to jettison their huge homes.
Millennials, surveys say, don't want big homes, and largely see themselves as car-less city-dwellers, not suburban commuters.
So who will buy all of the Boomer McMansions? Will Millennials, as they have kids and go to buy their second homes, go big or stay small? Only time will tell.
To view the original article, visit the WAV Group blog.