Wednesday, April 9, 2014 / by Fra Jamir
Charleston, SC real estate investors come from every kind of background, but all share a common trait: they like to think ahead. For that reason, investors eyeing Charleston apartment building prospects may want to take a close look at what’s going on with the Millennial generation.
For those of us who are a bit uncertain about which group is considered “Generation Y” and which are “Millennials,” there’s a reason for that. Both terms refer to the same group—everyone born between 1977 and 2000. And whatever you call them, they are a very important demographic. According to some statistics, they are 80,000,000 strong! That makes them a larger demo than Baby Boomers, and 20% larger than those who come next: the Gen X’ers.
PWC (PriceWaterhouseCoopers LLC), the widely-respected financial and business advisers, have come up with some interesting generalizations about Gen Y that could affect the prospects for apartment owners and investors. According to their 2014 Trends Report, members of Generation Y are more likely to live in either a medium-sized or big city than previous generations. Generation Y’ers also plan to stay there for the foreseeable future—40% of Gen Y’ers say they want to be living there in five years. This compared with only 23% of generation X’ers and 14% of Baby Boomers.
Some other profile characteristics fall in line. Generation Y’ers are the least car-friendly of any demographic. Two years ago, CNN reported that there had been a 30% drop in the share of new car purchases by 18 – 34-year-olds. When asked about the community features they thought most important, 82% thought living within walking distance of work and school was highly important; and Gen Y’ers are also more likely than other generations to walk or use public transit.
Generation Y’ers are also significantly more likely to be on the move over the next five years. Approximately 63% fell into that category, compared with to 42% of the overall adult population. A full 38% plan to move into an apartment, duplex, row house or townhouse.
For Charleston area apartment building investors seeking rental income, there is more reason to be interested. According to a study produced by the non-profit Urban Land Institute, the majority of Gen Y’ers do not intend to purchase over the coming decade. That sounds like a reassuring note on the demand side.
Real estate website Trulia had a final piece of the puzzle, this one due to the slowly-building economic recovery. Their 2014 housing predictions report forecasts that apartments will be the first stop for young adults who are finally able to move out of their parents’ home.
All in all, it looks like the Charleston area apartment building market should be worth investigating this spring.
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Interested in buying a Charleston area home? Visit: www.discovercharlestonareahomes.com
Jeff Cook Real Estate