As the largest generation to date, Millennials have been the key focus of the past decade in multifamily. The generation's demand for immediate, in-town walkability, amenities like pet spas and parks, flexible leasing options, and a desire to rent vs own has led to an amazing influx of rental development in urban corridors. Over the past 5-10 years, the bulk of the world's largest generation has moved to the nation's major metros to start their young careers where they can grind by day and enjoy the in-town nightlife on the weekends. The result led to increased rental rates, brand new, high rise product, and luxurious amenities to woo renters to the newest building in town. But, are things changing as this generation ages?
The past year has led to major adjustments in our lifestyles to say the least. Many argue, even as we begin to return to our "normal" way of life, that the pandemic has fast forwarded user trends and human behavior by 5-10 years. We've seen the benefits and scalability of working from home, spending less time commuting to work each day, and the positive impact we can have on greenhouse gas emissions. Not to mention the savings companies can create by not having a physical office space. The shift in work behavior interestingly coincides with the world's largest demographic to date getting older. Millennials are now reaching the time in their lives where many are looking at buying their first homes and are seeing the value of having more space (indoor and outdoor) given the lockdowns of the past year.
The housing market is in the midst of a fascinating shift. Many who lived in smaller apartments in-town have moved outside of the nation's cities in favor of more space in the suburbs. Some are even picking up and moving to more affordable states like Texas and Florida altogether. This shift has led to skyrocketing single family home prices as we go into the high season of Summer. We are living through a very simple, but very large problem of supply and demand. Millennial renters and other city dwellers are in the market to by a home outside of the city, creating great demand with little supply to meet it. Many sellers are sending buyers into bidding wars well above asking price due to lack of single family supply in the market, which was a result of the '08 housing crash.
So, with Millennials aging and wanting more space, but with little single family supply for sale where do they go? Multifamily developers think they have the answer. Many are focusing on a rapidly growing concept that many industry leaders believe to be the new "thing" in American housing- single family rentals. Renters get the perks of having more square footage, a yard, private garage, and amenities, but with the flexibility and maintenance that comes with renting. With so little inventory for sale and a huge demand for the lifestyle that a single family home brings, developers are likely onto something. Private owners have been able to rent out their homes to renters in the past, but it often comes without the care free maintenance, amenities, and resident events apartment renters have grown accustomed to. This new concept looks to offer all of that and more.
Having launched the digital marketing strategy for The Bungalows on Pine Cliff in Flagstaff, AZ, Street Digital Media is seeing the interest level of the emerging multifamily development concept firsthand. The strategy focuses on driving brand awareness and lead generation on behalf of the master-planned development, which serves home to one, two, and three bedroom single family homes for rent. Residents also get the perks of a 24-hour fitness center, fire pits, two pet parks, pet spa, clubhouse, and unprecedented mountain views. With the current state of the real estate market, for sale and rental, expect to see much more of this in the years to come.