You’ve probably heard that Millennials — the members of Generation Y — aren’t flocking to single-family housing. Instead, they’re choosing to rent for longer periods of time.
This is true. But this doesn’t mean that Millennials will put off buying a home forever. They’re just taking longer to get to that point.
Just ask Steve Joung, chief operating officer of Chicago’s Pangea Properties, a private real estate investment trust targeting the distressed residential multi-family market. He himself is a Millennial. Like his peers, he’s chosen to rent. But he’s realistic enough to know that his renting days won’t last forever.
“Because of where I work, I’d like to say that Millenials will be renting forever and ever, but I don’t think that is necessarily true,” Joung said. “As Millennials get older, and their priorities change, they’ll look to get married and start a family. They might then see the suburban market as a better value. When you talk about value, it’s all relative. It’s a constant reevaluation.”
The challenge, of course, is that while it’s great to live in the middle of a city such as Chicago when you’re a young Millennial, it gets harder to do so when you have kids.
“It’s very expensive to raise a family in the city,” Joung said. “And it’s very inconvenient to raise a family in a small apartment in the city. Buying a single-family home in the middle of the city requires a lot of money.”
This doesn’t change the fact that Millennials, at least before they start families, are urban-focused. As Joung says, they want to live near restaurants, bars and culture. That can all be found in the urban centers of major cities.
“The mentality among my peers is to find that apartment in or near the city,” Joung said. “It’s always, ‘As long as I can stay in the city, I will. I’ll move to the suburbs when I have to.’ We’ll hold onto our city living a little longer.”
