A new survey uncovers what many may consider confirmation of a multigenerational housing trend. What is it and how will it affect real estate investing in the future?
A report by CNN Money, covering the survey by a prominent real estate brokerage brand, shows that 18 to 34 year-olds are moving back home. What’s more; they think it is “perfectly acceptable to live with their folks for up to 5 years after college.” Recently dubbed multigenerational housing, this trend is becoming increasingly popular under the current market conditions.
It is certainly a smart personal finance move for those that can hack living with their parents, especially in overvalued markets. Perhaps many learned from the rash decisions of their parents to leave the nest. This could help to build a more solvent and financially strong class in the long run. Accordingly, the more sustainable younger classes are, the longer this upward housing run will be.
It’s doubtful that their efforts will last too long, or parents will let them stay for a prolonged period of time. As they get older, living situations become more difficult, especially when they break 30 and are popping out kids of their own.
In other cases, the whole family is moving in together. It is not uncommon for families to move into a larger home that will accommodate them all. Perhaps this signals fewer reasons to downsize, which will keep housing inventory levels tighter and push home prices up further.
It also bodes well for real estate investors dealing with larger single family homes. Another great niche benefiting from this trend is homes with mother-in law suites. They can offer great value, just make sure additions or improvements are legal and permitted.
A secondary niche could also be those living at home that don’t have a track record of paying rent or mortgages and lack depth of credit, but can be great candidates for owner financing or rent to own.