Home Buyer Preferences by Generation

Despite the generational differences, all home buyers prefer to live in a single family detached home. Boomers and millennials, Gen X and even seniors, prefer a single family detached home. But still the myth exists that boomers want to live in an apartment style condo and go home on an elevator. Not so, according to a new study by the National Association of Home Builders. When surveyed only 8% of boomers preferred to live in an apartment style condo. Boomers who currently live in a single family home simply want to downsize to a smaller, more energy efficient home. In that regard, they are just like all home buyers where 90% want energy star rated appliances and over 88% want green home features including a tankless water heater and higher rated insulation than required by local code. And over 75% of boomers and seniors prefer that new home to be one-story.

The good news for home builders is that over half of all home buyers now prefer a new home.  Boomers and seniors prefer to downsize but that magic square footage number is still almost 1,800 square feet. It is the Millennial and Generation X buyers who want 2,315 plus square footage, including four bedrooms and three full baths. Their goal is to move-up from a 1,600+ square foot home, which may even be attached, to a larger home and lot. Here in Anchorage, which is an active move-up market, as newly formed families add children and the small single family home or 1500 square foot attached duplex condo becomes too small for their expanding families. All buyers, except seniors, want to increase the size of their lot when they make a move. With Anchorage’s residential land shortage, that’s a preference that gets quickly squashed.

A traditional forward mortgage is how most buyers would pay for a home, according to the NAHB study. However, 28% of those surveyed would pay up front in cash, a trend we are also seeing in Anchorage. Only 3% would use a reverse mortgage despite numerous commercials touting its benefits. Anchorage’s housing market has long stood by itself when it comes to the wants and needs of its buyers. In most instances, our new home prices are $50,000 plus higher than the resale home just a half a mile away with approximately the same square footage. In just a handful of years, we’ve gone from a four star energy rating to five star which has resulted in major increases in cost but with energy benefits to the consumer. Anchorage’s shifting demographics makes it one of the most diverse populations in the nation and with it comes the need for  more innovative housing  and land use plans. Multi-generational families require two master suites which result in a larger footprint on a smaller lot. Seniors and boomers prefer ranches which results in a need for higher lot coverage ratios. More amendments are still needed to the new Title 21 if Anchorage is going to meet its housing needs of the future.