House builders are facing a tough problem in terms of their target buyers. Baby boomers arguably have more money to spend especially on luxury real estate but millennials have overtaken them in number of home purchases in the United States.
According to Realtor Mag, boomers have the capacity to splurge big on their homes which make them a lucrative real estate demographic. Millennials, on the other hand, don't spend as much but their sheer number alone can make up for the smaller percentage of profits. While both markets can prove to be profitable, the biggest concern builders have is the difference in home design preferences.
Millennials have already surpassed boomers in the number of homes bought. They account for 36 percent of all housing sales in the U.S. while boomers are closely following behind at 34 percent. The National Association of Home Builders held an annual conference recently and reported this finding.
Size is a concern where boomers and millennials don't usually agree on. The younger generation wants bigger and more spacious homes while the older ones prefer to be more conservative and practical in the use of space. For millennials, the ideal house size will have at least 2,375 square feet while for boomers the number is much lower at 1,879 square feet. Dan DiClerico from Consumer Reports said, "Millennials have become the top homebuying demographic in the country. That's despite the fact many of them are saddled with enormous student debt and soaring apartment rentals."
Meanwhile, in a post by The Urban Developer, as testament to the buying power of boomers, more than 70 percent of the Yarra House luxury house development in Australia is reported to have been bought by tenants who are aged above 50. According to Michael Yates, a veteran in real estate and pioneer in South Yarra, "We ensured our next development, 55 Claremont, ticked the boxes for baby boomers - spacious and flexible floor plans, a boutique development in a prime location and a dress circle view of Melbourne."
