There are many names for the Echo Boom generation: Gen Y, Generation Next, Net Generation, Millennials, Boomerang Generation and Trophy Generation, to name a few (OK, several).
Regardless of what you call them, the members of this generation are quickly coming of age; some are even starting to enter the housing market and there are many, many more to follow.
Echo boomers were born roughly between 1982-95 — they are largely the offspring of baby boomers.
Fast forward to 2010. There are approximately 76 million echo boomers between 15 and 28 years old, making them second in size only to the baby boomers (age and population figures cited here represent an approximation based upon information found in studies done by the National Association of Realtors, current U.S. Census data, Wikipedia, and various media sources).
According to current U.S. Census figures, 67.2 percent of this generation can be expected to become homeowners by their mid 30s, which equates to just over 35.5 million households (U.S. Census homeownership rates are calculated based on households, not people).
The National Association of Realtors’ 2009 Profile of Home Buyers and Sellers predicts that of this 35.5 million, 21 percent will be single female buyers, 12 percent will be single males, and 61 percent will be married couples or partners (couples/partners are counted as a single household).
It’s worth pointing out here that the aforementioned U.S. Census figures also state that since 1982, homeownership rates have fluctuated very little; anywhere between 64 percent and 69 percent during this 28-year span.
As you wrap your head around those figures, think about the impact that this generation is going to have on housing in the coming years. According to a recent economic report by Moody’s, builders are currently developing about 500,000 housing units a year.
Add into this equation that the echo boomers will be buying homes alongside repeat purchasers from other generations and you can quickly surmise that in the foreseeable future we are going to have a shortage of housing in the "more affordable" markets (where homes are priced at or below the area’s median price). …CONTINUED
The onset of the echo boomers in the housing market is a stark reminder of how important our community’s growth-management plans are. The sheer size of the Echo Boom generation will have a powerful effect on housing demand over the next decade, but will there be enough homes to meet that demand?
Current studies say no, reinforcing the importance of implementing smart growth management NOW. The first wave of change will likely occur in the more affordable price ranges — especially in those areas that are close to job centers. Over time, the effect will fan out and be felt by the outer suburbs, causing a chain reaction of sales up the price points.
The Echo Boom generation has been defined as high-tech, high-touch, social-networking, iPod-listening natives of the digital realm who trust their peers’ advice over most forms of advertising. This is the generation that will likely find the home of their dreams on a 4G wi-max third-generation iPad and will contact their real estate agent via Twitter or text message.
But as foreign as some of this may sound to some of you, they are (and will be) homebuyers nonetheless, and real estate professionals and companies need to continue to adapt to this generation’s expectations and habits.
So, the moral of this story is that I believe that the echo boomers represent the silver lining for the real estate market and U.S. economy. That might be a lot of responsibility for a single generation, but they’re unarguably emerging as the next heavyweights in housing, and I might add: not a moment too soon.
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J. Lennox Scott is chairman and CEO of John L. Scott Real Estate. This article was reprinted with permission.
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