Not too long ago, builders followed a one-size-fits-all approach with prospective homebuyers.
Basic, plain vanilla floor plans were designed for a diverse group of people.
Now, demographics are driving housing styles and choices. Generation Y, Generation X and baby boomers have all sorts of ideas about their dream home. And homebuilders and multifamily-housing developers are catering to these segments to expand their market share.
“Builders are absolutely focused on serving the different demographic groups,” said Stephen Melman, director of economic services for the National Association of Home Builders. He pointed out that each age group has different forces shaping its housing decisions.
“Gen Xers are the sweet spot in the market. Roughly in the 35-to-45 age range, they are going full blast with dual incomes, kids and looking for larger, more efficient homes. For these trade-up consumers, builders must offer well-designed homes that give buyers a reason to move,” he said.
Melman noted that Generation Y is the market segment with the greatest pent-up demand but has delayed entering the housing market.
“They are sitting on the sidelines and need to move out of their parents’ basement,” he said.
“Boomers, who are going to be empty nesters, want to give up that five-bedroom house and downsize,” Melman said.
The young, tech-savvy Generation Y, also known as millennials, continues to redefine the American Dream. Members of this group, born from the 1980s to 2000, desire flexibility in housing choices, and renting permits that.
Nationwide, the slew of new high-end apartment buildings with amenities galore is testament to the appeal of renting.
James Mateka found what he wanted in a studio apartment at K2, a 34-story, 496-unit luxury rental tower completed in 2013 by Fifield Cos. and Wood Partners.
In the West Loop at 365 N. Halsted St., K2 appeals to techies with such features as Wi-Fi-equipped cabanas next to the lap pool.
The 25-year-old medical student said he and his friends take into account the following factors when choosing a place to live: “First is price. Second is proximity to the city with restaurants and sports bars and entertainment for nights and weekends. Third is style. My generation prefers modern-looking buildings rather than traditional,” Mateka said.
“Housing is just a place to live,” he said. “I’m not ready to settle down and start a family.”
Younger buyers want technology in a home, said Helen Velas, president of Eleni Interiors in Naperville. “They want automated lighting and sound and even motorized shades — all controlled from their phones. State-of-the-art electronics are more important than curb appeal. They want space they can actually use — social spaces, but not a formal living room. They want a home office or a place to work and plug in,” she said.
“In decorating styles, millennials like retro-modern with brighter colors than older groups,” Velas said. “They don’t want separate living and dining rooms. Because they are on a budget, they do a lot of do-it-yourself projects. They want to live in the city where the action is and don’t want long commutes to work.”
Beth Callender, principal at the Greenhaus advertising and marketing agency in San Diego, said many millennials have no illusion about buying a home and settling down. They rent because they are not ready to put down roots or to be burdened by a mortgage.
“They are going through a sort of delayed adolescence, taking longer to finish school, marry and start a career,” she said.