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Baby boomers have turned multi-story homes with expansive lawns into a sign of economic prosperity, but their children may well be driving down this status symbol.
The Millennials, who are now old enough to buy houses, are already destroying the first house – and the suburban mansion may not be so far behind.
Look no further than the Wall Street Journal's current literature on how big houses rank in the real estate market to get a clue to their decline. In March, Candace Taylor, of the Journal, reported that the Millennials were avoiding big houses built for baby boomers built 15 years ago in Sunbelt states like Florida, Arizona and the Carolinas. Houses built before 2012 are sold at a significantly reduced price – sometimes almost half – and homeowners make no profit, she wrote.
Read more: The millennial generation takes 3 key decisions that annihilate the home of departure – and it changes what homeownership in America looks like
In Los Angeles, the market shows a surplus of mega-concessions registered at a threshold equal to or above the threshold of $ 20 million, said Katherine Clarke for The Journal. And while the McMansions – large suburban homes built with mass-produced architecture from the 1980s to the early 2000s – once had a connotation of wealth, they now remain on the market.
The decline of McMansion is not sudden. Madeline Stone, of Business Insider, reported on the slow demise of this style in 2017, citing the influence of changing attitudes toward conspicuous consumption in the aftermath of the recession.
In the same year, Kayleigh Kulp for CNBC reported that, overall, large single-family homes – defined as homes ranging from 2,900 square feet to 4,000 square feet – received between 12% and 45% fewer realtor transactions .com than in others the market. They were also selling up to 73% slower on average, writes Kulp.
Millennials continue to fuel the fire, they said no to the suburban home by choice – because of different preferences and lifestyles – and by force – because of the harsh economic conditions to which they were face.
Technology and focus on quality make the reduction of size easy and elegant
A persistent market for spacious homes is partly the result of Generation Y's desire to reduce the size.
On the one hand, millennials usually have an affinity for a minimalist lifestyle and are not interested in the outdated interior design that often characterizes baby boomer homes, avoiding moldings and ornate details for clean lines and open floor plans, Taylor writes.
"Boomers" have also built their homes too much, and then they have cheated them too much with their personal amenities, "said Dowell Myers, professor of policy, planning and demographics at the USC at USC. , in a podcast in April 2019 with Professor Benjamin Wharton Keys. He said this contrasted with millennials' preference for more sparse living.
But the design preferences have not simply changed because of the taste. Robert Shiller, Nobel Prize-winning economist and professor at Yale University, told The Journal that people did not need more space in their homes as society became technologically advanced, said Tanza Loudenback of Business Insider.
Read more: 5 millennials who became homeowners in their twenties share their best tips for buying your first home
"For example, we do not need elaborate kitchens because we have all kinds of food delivery services." And maybe you do not need a workshop in your kitchen. basement either, "said Shiller. "Previously, you had a binder for your tax information, but now everything is electronic, so you do not need it anymore, and shelves for those who read a lot." We now have ebooks, so need more shelves. "
Even the millennia rich reduce their numbers. They care less about size than quality, said Business Agent Burt Minkoff previously of Douglas Elliman, real estate agent in West Palm Beach, to Business Insider. He added that they were also concerned about the pedestrian potential – an aspect that several real estate agents in the country have cited as a top priority in Business Insider.
Keys and Myers also pointed out that younger generations prefer to live in cities close to their jobs. Baby boomer households are in the suburbs.
Just take the growing phenomenon of small houses: although the movement consists of a niche and is not representative of the general population of the millennium, it makes a broader statement about the generational tendency to minimalism and convenience.
Millennia do not have the means to buy housing – but they could still be a bad investment
There is also the underlying problem of affordability – even for millennial women who dream of a big house, this one may be inaccessible.
First time home buyers will probably pay 39% more than they did almost 40 years ago, according to Student Loan Hero. A report from SmartAsset found that in some cities, the median home far exceeded the median income, so it might take almost ten years to save for a down payment of 20%.
The millennial generation is also struggling with a higher cost of living and a huge student loan debt, further delaying savings for a down payment. Even though millennia can afford to buy a home, buying big is not always the best investment.
A 2016 study by Trulia found that premiums paid for McMansions had dropped significantly in 85 of the 100 largest cities in the country, according to Bloomberg.
"People do not like to buy dated objects," Tim Stone, Gehman, design director at Toll Brothers, told one of the country's largest luxury home builders. "They know that they are going to have to resell it, and they finally know that it's an investment.
Read more: The 25 American cities where most millennia live with their parents, ranked
And some Generation Y people who can afford to buy a house prefer to rent rather than buy because they do not want to deal with the hidden costs of homeownership. .
They could be on something. Shiller told the Journal that buying a house – especially sumptuous – was not a worthwhile investment because growth in the housing market generally did not compensate for the years of business. Depreciation and maintenance costs, said Loudenback.
There is also the fact that living in a home bought well below what you can afford is the key to wealth creation, said Sarah Stanley Fallaw, director of research at the University of Ottawa. Affluent Market Institute, in his book "The Next Millionaire Next Door: Sustainable Strategies for Wealth Creation."
This is attractive for a generation that is financially overdue.
A change in the American dream
As the older generation Y reaches the late thirties and begin to settle in, some are swapping the hustle and bustle of urban living for suburban and suburban comfort where housing is more affordable . In fact, Valerie Bauerlein of the Wall Street Journal said they were following in the footsteps of baby boomers, but were more selective about the location.
So, is the suburban mansion really an endangered race, or is it just a breed that is not currently required?
This is not the first time that experts predict that the McMansion era is over. In 2011, after the fallout from the financial crisis, Slate and The Journal said the McMansion style was disappearing.
In the podcast, however, Keys noticed signs of an awakening. He pointed out that Generation Y millennials' incomes were higher and that home mortgages had become more affordable. He wondered whether millennials' housing preferences had actually changed or whether the delay in home ownership was only delaying McMansion's purchase.
And of all single-family homes completed in 2017, according to the latest US Census data available, the average area was 2,631 square feet – up from 1,660 square feet in 1973.
Read more: The millennial generation changes ownership in eight different ways: moving from suburban migration to frustration
The suburban mansion may not be completely dead, but its perception among prominent homebuyers is changing. That they choose not to buy mansions, that they can not afford to buy them or later, one thing is clear: Millennials preferences for housing change the way they live. appearance of the American dream.
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