The New American Dream: Why People Are Choosing to Rent
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Transcript of The New American Dream: Why People Are Choosing to Rent
WHY PEOPLE ARE CHOOSING TO RENT
THE NEW AMERICAN DREAM
Once upon a time, the American Dream looked something like this...
Not anymore
Today, more people are choosing to move out of their homes...
and into apartmentsToday, more people are choosing to move out of their homes...
Home ownership has reached a 19-year low
U . S . C E N S U S B U R E A U
In May 2014, the national apartment occupancy reached 95% for the first time in 6 years.
Nearly half of all renters are former homeowners. This percentage continues to grow despite record low home prices.
2012 2013 TODAY
33.6% 35.1%44.1%
So, what do we know about these new renters?
They are a new class of consumer who are…
Renting by Choice
Looking for Technology
Local Restaurants
Urban FeelWalkability
6 of 10people would sacrifice a bigger house to live in a neighborhood that features a mix of residences, stores and businesses.
Millennials tend to place more value on amenities than on square footage.
Some Desirable Amenities Include…✓ Wi-Fi Connectivity ✓ Communal Spaces ✓ Walkable Locations ✓ High-End Fitness Center
This is a generation of online social networking and herding—or meeting at a social gathering in a moment’s notice.
Hey! We’re meeting at Starbucks in 5 mins.Want to join?
Sure! See you soon!
They value community, ideas, information and a healthy work/life balance.
Millennials who want to live in an urban environment
77%
They want to be within walking distance of peers, work, services and hangout spots.
Millennials are also waiting to get married, start families and buy homes.
Married adults ages 18-34 in 1983
46%
30%Married adults
ages 18-34 in 2013
Married couples ages 18-34 with children in 1983
39%
Married couples ages 18-34 with children in 2013
29%
36%Americans under age 35 who own a home, the lowest level on record
Millennials’ attitudes toward homeownership have changed because of the housing crisis and recession in the mid-2000s.
Many saw their parents lose a significant portion of their savings due to decreased home prices and have since lost confidence that homeownership is the way to develop wealth.
HOUSEFORECLOSED
The “Bank of Mom and Dad” is closed. Since their parents must rebuild their retirement portfolios, millennials are not getting the same down payment assistance that the generation before them received.
In addition, many 25- to 34-year-olds have taken on consumer and educational debt and are now unable to qualify for a mortgage.
Federal student loans outstanding have shot up 360% since the start of the recession, rising from $98 billion to $453 billion in just four years.
2007 2008 2009 2010
$98B
$453B
Rentership rates for households aged 30-64 are the highest they’ve been in 30 years.
They are also baby boomers who are trading in their single-family suburban homes to be closer to urban centers.
100%Estimated increase in renters ages 65+ from 2010 to 2013
These are people who can affordto buy but choose to rent.
50%Over half of renters in U.S. metro areas could afford to own a home
Need more proof?
Look at the average person interested in renting at Haven, a luxury rental community at Avalon, a $600 million mixed-use development in Alpharetta, GA opening October 2014…
34%
34%
31%Under 35 51+
Interested Renters
by age
Interested renters are equally distributed by age.
36-50
of prospects currently own their homes
47%
but are considering a move for amenities and the lifestyle luxury rentals offer.
HOUSE FOR SALE
31%
28%
23%
18%
Interested Renters by annual income
No Answer
>$75K
$76K-$125K+
$126K +
“In many cases, people are abandoning The American Dream of homeownership and choosing luxury rentals because of walkability and accessibility to desirable amenities that high-end mixed-use developments offer.”RICHARD MUNGER
PARTNER AND V.P. OF DEVELOPMENT
NORTH AMERICAN PROPERTIES
A shift in attitude and values is contributing to more renters entering the market.
“The rental economy is part of a growing post-recession movement to value experiences over possessions.”CLAIRE CAIN MILLERTHE NEW YORK TIMES
Homeowners are often anchored to their neighborhoods…
While renters have the ease of mobility as they enter different stages of life.
Renters are also free from some of the daily stresses plaguing homeowners.
They don’t have to worry about yard work, home repairs and unexpected maintenance expenses.
They can simply enjoy what’s outside their front door.
While homeownership may have its perks, it’s pretty hard to compete with this…
AVALON
PIKE & ROSE
MISORA AT SANTANA ROW
THE AMERICANA AT BRAND
People pay a premium for this lifestyle.
AVERAGE APT.SAN JOSE, CA
MISORA ATSANTANA ROW
Studio$905
Studio$1,775425 square feet500 square feet
AVERAGE APT.ALPHARETTA, GA
HAVEN ATAVALON
2B$1,162
2B$2,3501,200 square feet1,244 square feet
As walkability increases in a community, so does property value.
$300per
month to apt.rents
$82per sq. ft. to
homevalues
$9per sq. ft. to
office rents
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$7per sq. ft. to retail rents
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$ $$$$$
$$$$
Size of new apartments in
U.S. fell to lowest square footage
since 2002
square feet1,043
People are downsizing their living space…
… and opting for a sleeker, more
modern option.
Having to deal with inconveniences of everyday life.
Luxury properties offer a concierge,
exclusive services &benefits like valet.
“Apartments are shrinking because when you live in a mixed-use community, what’s outside becomes an extension of your living space. This is why developments like Santana Row and Pike & Rose are achieving higher rents and higher occupancies.”MARK TORO
MANAGING PARTNER
NORTH AMERICAN PROPERTIES
prospects are on the interest list for one of the 250 luxury rentals at Haven at Avalon
2,025
Here’s what they are lining up for…
Gigabit Community
Programmed Public Spaces
Urban FeelWalkability
Five-Star Concierge
best restaurantsIN YOUR BACKYARD
best retailersIN YOUR LIVING ROOM
People are already considering a new version of The American Dream.
Haven at AvalonLIVE IT
November 2014MOVE IN
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Set Your Site in Greater Philadelphia by Jerome Rozen (image)Friends having fun outdoors by Svetlana Damjanac / iStock.com (image)Smartphone designed by George Agpoon / The Noun Project (icon) Footprint designed by Jule Steffen & Matthias Schmidt / The Noun Project (icon) City designed by Nicholas Menghini / The Noun Project (icon)Crowd of People Walking on the Street by Rafael Ramirez Lee / Shutterstock.com (image)Receiver by Sergey Krivoy / The Noun Project (icon)Coffee by Sam Ahmed / The Noun Project (icon)Car by Laura Beggs from The Noun Project (icon)Martini Glass by Stanislav Levin / The Noun Project (icon)Shopping Bag by Erin Standley from The Noun ProjectDumbbell by Ola Möller from The Noun ProjectMortar Board by Paul Souders from The Noun ProjectAnchor designed by Jeremy Elder / The Noun Project (icon)Airplane designed by misirlou / The Noun Project (icon)Pike and Rose Groundbreaking by Maryland GovPics / Flickr (image)Santana Row by Bruno Pinheiro / Flickr (image)The Grove in Los Angeles, from above, no. 12052203 by Eric E. Johnson / Flickr (image)The McMansion by Dean Terry / Flickr (image)Thumbs Up designed by Alv Jørgen Bovolden / The Noun Project (icon)US Open Parking Lot by alex92287 / Flickr (image)
Caulking window by kimkole / iStock.com (image)Cookie Cutter Houses by Ann Walsh / Flickr (image)Santana Row by Eric Fredericks / Flickr (image)Reception Bell designed by Catia Marsh Mallow / The Noun Project (icon) Footprint designed by Jule Steffen & Matthias Schmidt / The Noun Project (icon) City designed by Nicholas Menghini / The Noun Project (icon) Wireless designed by Edward Boatman / The Noun Project (icon)The Americana at Brand by Chris Yarzab / Flickr (image)
IMAGE SOURCES
Axiometrics | axiometrics.com/company/pressreleases/apartment-occupancy-hits-95Survey by Apartments.com | realestateeconomywatch.com/2014/01/nearly-half-of-all-renters-are-ex-homeowners/Survey by Trulia | magazine.good.is/articles/most-americans-want-a-walkable-neighborhood-not-a-big-houseNational Multi Housing Council (NMHC) | finance.yahoo.com/news/landmark-resident-survey-identifies-top-173400335.htmlNational Association of Realtors | realtor.org/articles/how-millennials-move-the-car-less-trendsU.S. Census Bureau | tampabay.com/news/business/realestate/pricey-posh-tiny-apartments-rule-tampa-bays-big-money-rental-boom/2189650 Urban Land Magazine | urbanland.uli.org/infrastructure-transit/housing-america-s-graying-population/ Harvard Joint Center for Housing Studies | harvard-cga.maps.arcgis.com/apps/StorytellingTextLegend/index.html?appid=7e85ff667f804fe0aaf10a5a27db9c39Hart Research | macfound.org/media/files/How_Housing_Matters_2014_FINAL_REPORT.pdfRent Comparison (San Jose, CA) | forrent.com/apartment-community-profile/1000059389.phpRent Comparison (Alpharetta, GA) | apartmentguide.com/apartments/Georgia/Alpharetta/The-Lex/259/Study by Brookings Institution | nytimes.com/2012/05/27/opinion/sunday/now-coveted-a-walkable-convenient-place.html?_r=1&U.S. Census Bureau | census.gov/construction/chars/pdf/mfu_medavgsqft.pdfU.S. Commerce Department | bloomberg.com/news/2014-07-10/renters-trading-size-for-frills-fuel-u-s-apartment-boom.html
http://www.nytimes.com/2014/08/30/upshot/is-owning-overrated-the-rental- economy-rises.html?_r=0
DATA SOURCES