Millennials and Home What You Need to Know Today

Transcription

1 Millennials and Home What You Need to Know Today Consumer Insights 2014 Survey Period August October 2013

2 Our Agenda The Millennials CONSUMER INSIGHTS 2014 A Little About Us Demographic Trends Creating Answers Together Product Solutions Community Solutions Trends We Must Answer

3 Our Agenda The Millennials CONSUMER INSIGHTS 2014 A Little About Us Demographic Trends Creating Answers Together Product Solutions Community Solutions Trends We Must Answer

4 Our Mission: Trusted Analysis for Executive Decisions

5 Market Coverage

6 Key Leadership in 9 Offices in 7 States We have taken pride in our team and our leadership throughout the company. Many of our team members know many of your assets. We will rely on the most qualified talent with the greatest market knowledge for the analysis and strategy on your assets. Steve Dutra Sr. Vice President Dean Wehrli Vice President Lance Ramella Sr. Vice President Jody Kahn Sr. Vice President John Burns CEO Dan Fulton Sr. Vice President Mollie Carmichael Principal Nicole Murray Vice President David Kalosis Sr. Vice President Chris Porter Vice President Don Walker President Lisa M. Jackson Sr. Vice President Lesley Deutch Sr. Vice President Ken Perlman Sr. Vice President Pete Reeb Sr. Vice President

7 Vision & Leadership Profitable Results Market Health Marketing and Sales Demand by Lifestage and Price Financial Testing Lower Risk Better Profit Better Decisions Consumer Preferences Product Solutions Housing Supply Competitive Environment

8 Vision & Leadership Profitable Results Market Health Marketing and Sales Demand by Lifestage and Price Financial Testing Lower Risk Better Profit Better Decisions Consumer Preferences Product Solutions Housing Supply Competitive Environment

9 Our Agenda The Millennials CONSUMER INSIGHTS 2014 A Little About Us Demographic Trends Creating Answers Together Product Solutions Community Solutions Trends We Must Answer

10 CONSUMER INSIGHTS 2014 Who Are The Millennials? They were born..? 1978 to to to to 2000

11 CONSUMER INSIGHTS 2014 Why GenY?

12 They are the largest generation: million today born from 1980 to 2000 or 4.4 million per year

13 53%+/- of the 92M are 25 years or older. 48 million of this population will be 25 or older in Population by Year Born 5,000,000 4,500,000 4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000, , Year Born Sources: U.S. Census Bureau December 2014 Population Projections; John Burns Real Estate Consulting, LLC

14 What does it mean today for housing? 20% of aged 25+ population in % of aged 25+ population in % of aged 25+ population in 2025 Sources: U.S. Census Bureau December 2014 Population Projections; JBREC

15 This generation is far more diverse. 14% were born in another country Source: U.S. Census Bureau December 2014 Population Projections

16 Marriage and children has dropped significantly for the year olds. 68% Were married with children in % Are married with children in this group today. Sources: U.S. Census Bureau December 2014 Population Projections; JBREC

17 Annual Marriage and Children Trends at Years 70% 68% 65% Percent of Year Olds Married with Children 60% Percent of All Year Olds 55% 50% 45% 40% 35% 49% 40% 30% 25% 24% 20% Source: U.S. Census Bureau, Current Population Survey March Supplement

18 Sources: U.S. Census Bureau Current Population Survey; Centers for Disease Control and Prevention National Vital Statistics Report 1980 Age for Marriage and First Child 22.0 Marriage (Median) 22.7 First Child (Average)

19 Sources: U.S. Census Bureau Current Population Survey; Centers for Disease Control and Prevention National Vital Statistics Report 2013 Age for Marriage and First Child 25.8 First Child (Average) 26.6 Marriage (Median)

20 Children before marriage shifted in Women's Age at First Marriage and First Birth Women's Median Age at First Marriage Mother's Mean Age at First Birth Age Sources: U.S. Census Bureau Current Population Survey; Centers for Disease Control and Prevention National Vital Statistics Report

21 Fewer year olds have a driver s license today 93% Had a license in % Have a license today at

22 They are more educated 35% have a bachelor s degree or greater. 40% % of 30 Year Olds with a Bachelor's Degree or Higher 35% 30% 25% 20% 15% 10% 5% 0% Source: U.S. Census Bureau, Current Population Survey March Supplement

23 They have more debt. Total Student Loan Total Student Loan Balance = $1.12 % of Balance 90 Days Deliquent = 11% $1.2 $ % $1.0 $0.8 10% Trillions $0.6 $0.4 8% $0.2 $0.0 Q1-04 Q2-04 Q3-04 Q4-04 Q1-05 Q2-05 Q3-05 Q4-05 Q1-06 Q2-06 Q3-06 Q4-06 Q1-07 Q2-07 Q3-07 Q4-07 Q1-08 Q2-08 Q3-08 Q4-08 Q1-09 Q2-09 Q3-09 Q4-09 Q1-10 Q2-10 Q3-10 Q4-10 Q1-11 Q2-11 Q3-11 Q4-11 Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 6% Source: NY Federal Reserve Consumer Credit Panel/Equifax, John Burns Real Estate Consulting, LLC (Q2-2014, Pub: Nov-14)

24 Male Incomes for the older (25-34) Gen Y workers are lower than 40 years ago. $50,000 $45,000 Median Income, Year-Olds (Inflation-Adjusted 2013 Dollars) Males Females $40,000 $35,000 Median Income $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $ Source: U.S. Census Bureau, Current Population Survey, Annual Social and Economic Supplements

25 Female incomes are up, largely as a result of increased participation. $50,000 $45,000 Median Income, Year-Olds (Inflation-Adjusted 2013 Dollars) Males Females $40,000 $35,000 Median Income $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $ Source: U.S. Census Bureau, Current Population Survey, Annual Social and Economic Supplements

26 Homeownership for the year olds is lower than other generations. 70% Homeownership Rate by Age 60% 50% 40% 30% Under 25 20% 10% 0% Source: U.S. Census Bureau, Housing Vacancies and Homeownership Survey Q3-2014

27 Gen Y presents some great opportunities for the future: They are huge in volume They are highly educated They have pent-up household formation today They will be getting married and having children just delayed.

28 Our Agenda The Millennials CONSUMER INSIGHTS 2014 A Little About Us Demographic Trends Creating Answers Together Product Solutions Community Solutions Trends We Must Answer

29 CONSUMER INSIGHTS 2014 What is Consumer Insights? Consumer Insights is an annual consumer survey that is a focus-forward study on what new home shoppers want next when they buy their next home. TOTAL SURVEY RESULTS: 3 surveys completed annually 50,000+ Responses National and Local Primary Focus: Community and Home Preferences Typical cost could be $4,500 versus $45,000 for great primary research 29

30 CONSUMER INSIGHTS 2014 Our recent survey has a terrific sample! Consumer Insights 2014 Respondents: 2013 Home Shoppers 2,117 Resale (Zillow Shoppers) 19,915 New Home 30

31 CONSUMER INSIGHTS 2014 What does it cover? Attitudes How they live How they shop What they value Interior Style Interior style preferences Exterior style preferences Interior specifications Texture Color Home Kitchen Bathroom Private outdoor living Great space Architectural Style Yard Preferences Specifications & Technology Community Community Amenities Lifestyle 31

32 CONSUMER INSIGHTS 2014 Who is your new home consumer?

33 This generation has many lives today CONSUMER INSIGHTS 2014 Born 1980 to 2000

34 What age do they begin shopping? CONSUMER INSIGHTS 2014 Why are their fewer Gen Y shoppers versus their overall population? Of the 15% of Gen Y s shopping today 4% are under 25 33% are %are 30+ years and older!

35 and with that comes opportunity! CONSUMER INSIGHTS 2014 Today, Gen Y s 25+ is 20% of the population today. 15% of the new home shoppers according to our last survey. 25+ Population National Average 2014 Population Generation Silent Generation (Prior to 1946) 9% 15% Baby Boomers ( ) 44% 36% Gen X/Echo Boom ( ) 32% 29% Gen Y / Millennials ( ), 25+ Only 15% 20% 201 Popula

36 Gen Y s new home shopping population by region: CONSUMER INSIGHTS 2014 Does it shift from 15% on average regionally? Yes for logical reasons.

37 What Lifestage are they? CONSUMER INSIGHTS % Single 46% Young Couples 40% Families

38 CONSUMER INSIGHTS 2014 Couples and family formation are a big deal for new housing.

39 What does this mean? CONSUMER INSIGHTS 2014 Gear Up for Gen Y by 2019 as they should begin to rival their parents In the home shopping World. 25+ Population National Average 2014 Population 2019 Population Generation Silent Generation (Prior to 1946) 9% 15% 11% Baby Boomers ( ) 44% 36% 32% Gen X/Echo Boom ( ) 32% 29% 27% Gen Y / Millennials ( ), 25+ Only 15% 20% 30%

40 CONSUMER INSIGHTS 2014 What do they want in Housing? How are they different? and more?

41 CONSUMER INSIGHTS 2014 Affordability is first for this generation. Home Design follows location and price as top motivators National Average Gen Y / Millennials ( ) The most important factors motivating consumers to buy a new home Location 94% 93% Price 90% 91% Home design 81% 77% Safety 66% 71% Schools 38% 55% Neighborhood street appeal 49% 43% Accessibility 36% 29% Community amenities (like pool, parks, etc.) 36% 25% Energy savings technology 35% 21% Prestige 13% 12% Environmentally sensitive practices 10% 6% 41

42 CONSUMER INSIGHTS 2014 Their favorite styles are Modern traditional is the most preferred style, followed by style on a budget, casual organic and modern. #1 Favorite Style 42

43 CONSUMER INSIGHTS 2014 Modern traditional is the most preferred style, followed by style on a budget, casual organic and modern. Modern Traditional is the favorite style for Gen Y shoppers. Myth buster Gen Y is not all about contemporary. National Average Gen Y / Millennials ( ) Interior style preference Modern Traditional 23% 34% Style on a Budget 7% 9% Casual Organic 11% 8% Modern 6% 8% Casual Contemporary 6% 7% Rustic 8% 7% Mediterranean 9% 6% Coastal 7% 5% Traditional 9% 4% Cottage 4% 4% Minimalistic 4% 3% Chic 2% 3% Ultra Modern 1% 1% Asian Inspired 1% 1% Art Deco 0% 1% Tropical 2% 0% 43

44 CONSUMER INSIGHTS 2014 They want more! 76% wants larger in size versus 2013 Av floor area 2,200 sf 44% for all generations. 44

45 CONSUMER INSIGHTS 2014 Gen Y is much more casual National Average Gen Y / Millennials ( ) Favorite shoes Flip flops 23% 33% Stylish casual shoe 30% 25% Athletic shoes 23% 20% Dress shoes 9% 12% Loafers 7% 3% Stylish Boots 1% 2% Cowboy Boots 1% 1% Other 5% 3% 45

46 CONSUMER INSIGHTS 2014 Nationally, the top square footages consumers want today are from 1,500 to 2,500; however, most Gen Y consumers are looking for 2,000 to 3,000 square feet. The majority of Gen Y consumers are looking for homes between 2,000 and 3,000 square feet. This varies by geography. Home size preference Less than 1,000 square feet 1% 0% 1,000 to 1,499 square feet 7% 5% 1,500 to 1,999 square feet 24% 18% 2,000 to 2,499 square feet 28% 29% 2,500 to 2,999 square feet 21% 25% 3,000 to 3,999 square feet 15% 18% 4,000 to 4,999 square feet 4% 4% 5,000 square feet or more 1% 1% 46 National Average Gen Y / Millennials ( )

47 CONSUMER INSIGHTS 2014 They are less about privacy and more about pets! National Average Gen Y / Millennials ( ) Outdoor space preference Entertainment and recreation 76% 76% To provide privacy between me and my neighbor 79% 67% Children's play area 41% 63% Pets 48% 54% Gardening space 43% 32% Connection with the outdoors 53% 30% 47

48 CONSUMER INSIGHTS 2014 They want a lawn or a yard with a view Backyard preference National Average Gen Y / Millennials ( ) Large open lawn 15% 30% Open with seating area and views of mature trees and vegatation 25% 22% Covered outdoor room with fireplace 30% 15% Small area with firepit and seating 9% 9% Open area with views of woods 6% 6% Open area with firepit and seating 5% 6% Vegtable garden 5% 5% Small lounge area 4% 4% Kid's play area 1% 2% 48

49 CONSUMER INSIGHTS 2014 The majority of Gen Y consumers want suburban. 5% want urban. National Average Gen Y / Millennials ( ) Ideal Lifestyle Suburban master plan 41% 40% Suburban Large Lot 22% 27% Traditional Neighborhood Dev 21% 18% Rural 10% 9% Urban 5% 5% 49

50 Rural CONSUMER INSIGHTS 2014 The highest percentage of consumers want to live within minutes away in the 1) Inner Suburban areas followed by the 2) Outer Suburban areas. Interestingly, only 16% chose the City s Core. The least desirable location was Bedroom Suburban locations, 60+ minutes away. Bedroom Suburban (60+ mins) Outer Suburban (30-60 mins) Inner Suburban (15-30 mins) City Core National Average Gen Y / Millennials ( ) Locational preference Inner suburban 45% 55% Outer suburban 37% 38% City core 13% 16% Rural location 11% 10% Bedroom suburban community 7% 5% 50

51 CONSUMER INSIGHTS 2014 They want single family. 84% prefers single family detached. BUT this comes down to affordability and choice! National Average Gen Y / Millennials ( ) Home type preference SFD 77% 84% SFA 7% 6% Depends 14% 9% No preference 3% 2% 51

52 CONSUMER INSIGHTS 2014 Top 10 Trends, Gen Y 1. Design matters. Home design is amongst the top motivating factors. 2. Yes they want to own. 3. They want suburban and single family detached as they marry and have children. Single Gen Y households are more attracted to more urban locations for rental opportunities. 4. Affordability is #1. They WILL drive for affordability. However, they want to live 15 to 45 minutes from the core. Like their parents, they will drive for size as they marry and have children. 5. The want bigger inside and out for their growing households. 6. Focus on function over size. 7. Think social. Social Indoors and outdoors. They are a more casual generation and privacy is less important. 8. They want energy efficiency but they are not ready to pay for it yet. They want efficiency most! Time is the greatest commodity. 9. They love their dogs too! Pet parks are important for Gen Y and their parents. 10. Gear up for Gen Y to more than double in size in Look for this generation in the home shopping world in their late 20 s and early 30 s. 52

53 CONSUMER INSIGHTS 2014 There is a lot more Remember All of these trends change by geography and price.

54 Home & Specifications

55 Community

56 Product Solutions

57 Communication

58 Thank Let us help. Demographic Trends. Consumer Insights. Product Solutions. Please contact: Mollie Carmichael or Chris Porter or You!