by Dan Rafter
The multi-family market might soon get another boost if a recent study by Rent.com is any indication.
The study says that members of Generation Y — otherwise known as the Millennials — are finally financially sound enough to move out on their own. That, of course, means more business for the multi-family industry, especially in the urban areas — think places like Chicago, Minneapolis, Cincinnati and Indianapolis — that Millennials prefer.
These Millennials, though, aren’t always interested in buying homes. They’ve seen their parents struggle with a drop in home values, leaving many of them underwater on their mortgage loans. Many Millennials, then, are opting to put off owning a home. They’re concentrating today on renting.
Al Goldstein, multi-family investor and chief executive officer of Pangea Properties, understands this, and predicts that Millennials leaving the nest means good things for apartment owners and developers.
“Individuals who would have traditionally fallen under the ‘potential homebuyer’ category are now making the shift toward renting instead,” said Goldstein, in a written statement. “Gen-Y is no longer making the five-year plan to purchase a home.”
Goldstein said that many Millennials actually plan on lifelong renting, seeing it as a realistic alternative to owning a home.
“The shifting trends among Millennials have opened new opportunities in the real estate market,” Goldstein said. “The influx of long-term renters into the marketplace has not only resulted in increased demand, there has been an increase of competition as well.”