Chicago—When the Great Recession struck in 2008, the Millennial Generation was among the hardest hit. Caught in a plummeting economy characterized by enormous job cuts and limited new hiring, these underpaid and unemployed new-to-the-workforce folks didn’t have the economic wherewithal to move out on their own as previous generations did.
Many of those forced to take shelter under their parents’ roofs back then are now ready to stake their claim to their own places, according to a new study from Rent.com. But the Millennials, also known as Generation Y, are seeking households that are different from those of past generations, explains Al Goldstein, a multifamily investor and chief executive officer of Chicago-based private real estate investment trust Pangea Properties.
The five-year-old REIT targets the distressed residential multifamily real estate market and has more than 8,000 apartment units in the Chicago area, as well as Indianapolis and Baltimore.
“Individuals who would have traditionally fallen [within] the ‘potential homebuyer’ category are now making the shift towards renting instead,” Goldstein comments. “Gen-Y is no longer making the five-year plan to purchase a home.”
Beyond that, many young professionals view renting as their first choice, and see lifelong renting as a viable alternative to the traditional American goal of homeownership. “The shifting trends among Millennials have opened new opportunities in the real estate market,” Goldstein observes. “The influx of long-term renters into the marketplace has not only resulted in increased demand. There has been an increase in competition as well.”
Three quarters of property managers surveyed report the apartment applicants they are encountering are younger or the same age as those 12 months ago.
Thirty percent of survey respondents reported seeing more singles renting apartments, 42 percent reported having higher-income applicants than they had one year earlier, and 22 percent reported seeing more friends renting together, Taylor revealed.