Demographics alter home-buying decisions

“We are at a time when the cost of renting is more competitive” with the expenses of buying, said panelist J. Ronald Terwilliger, chairman and CEO of Atlanta-based Trammell Crow Residential, in a news release. “Over the past year, the psychology of the market has changed. People no longer feel that they need to get into homeownership now or they will get passed by.”

Given the slower rates of appreciation, Terwilliger said homeownership is a wise choice “if you plan on being in your home for at least five years.”

Another factor changing the landscape of homeownership is the difference in lifestyle preferences and priorities for Generation Y consumers.

While baby boomers viewed homeownership as a top priority to achieve as soon as possible in adulthood, their Gen-Y counterparts are more likely to delay homeownership, just as they are delaying other commitments such as marriage and childbirth.

The younger generation, according to panelist Gadi Kaufmann, managing director and CEO of Maryland-based Robert Charles Lesser & Co. LLC, is drawn to urban infill locations with dense designs that emphasize open space with ample light and glass.

Also, because this age group is largely socially conscious, cultural and ethnic diversity – and ample community gathering space – is essential in neighborhoods.

Because they are environmentally conscious, they support green building features that save energy, and because they are the “most connected” generation, wireless access is a must. Gen Yers may increasingly gravitate to more affordable second- and third-tier cities, if those cities can offer sufficient entertainment and recreational amenities, Kaufmann noted. Over the next 10 to 20 years, it is quite likely that “more small cities will have more high rises,” catering to the housing needs of echo boomers, he added.