The Other Side of the Coin
If we had a nickel for every article written about the Baby Boomer generation, we would most likely be living in the Caribbean sipping umbrella drinks and thinking about an afternoon nap. The ubiquitous Boomers have influenced modern America like no other generation and continue to do so as they move into retirement. As we have noted before, Baby Boomers will have a significant impact on apartment investing as they are now moving into a stage of life when they are more likely to become renters and remain that way for the rest of their lives.
But for apartment investors looking to capitalize on demographic trends, the Baby Boomers are only half the story.
Is there an Echo in here?
There is a second generation of Americans not as frequently mentioned but just as impactful on the future of housing in America, specifically in the apartment sector. The mainstream media might not be talking about them as much as their older counterparts (yet), but apartment investors should pay heed to this new generation. They are called Echo Boomers and they are just now entering the housing market. Industry experts predict that 15 million Echo Boomers will enter the prime “renter age” of 18-34 this decade.
The Echo Boomers are coming and they are going to be staying for a while.
Who are these guys?
Echo Boomers, also known as the Millenials, Gen Y or Generation Next, are the second largest generation in U.S. history (behind you know who.) They were born from 1982-1995 and are either the children or grandchildren of the Baby Boomers. There are approximately 80 million Echo Boomers, ranging in age from 16-29. They are highly educated, technologically savvy and politically active. Even though they are waiting longer than previous generations to marry and start families, they have high regard for a solid family life.
A generation shaped by events
Echo Boomers have grown up during some of the most important events in recent U.S. history. They were between the ages of 5 and 19 on September 11th, 2001. They have lived through two wars and two recessions – including one that has directly impacted their ability to get jobs and save money for their future. They have also experienced a historic housing crash that has impacted their views on owning vs. renting:
Generation Y’s attitudes toward homeownership have been changed by the housing crisis
and the recession. The number of people trapped by underwater homes that cannot be sold and the millions of foreclosures are tempering their interest in buying their own homes, and they will be renters by necessity and by choice rather than homeowners for years ahead.
– Housing in America – the Next Decade, Urban Land Institute
Where will Echo Boomers Live?
The Echo Boomers have been hit hard by the recession – and are becoming home owners at slower rates than previous generations.
Over 80 percent of all households aged 25 or under are renters, along with two-thirds of those aged 25 to 29.
– Joint Center for Housing Studies of Harvard University
Many Echo Boomers have found jobs, but have not saved enough money for a down payment on a home – fully 90% of Echo Boomers have less than $1500 of personal savings. All of this means it will take Echo’s several years longer than previous generations to buy their own home and as a result they will be renting later in life than previous generations.
Echo Boomers define the Apartment Investing for Decades