When we look at the differences between the Generation X population and the Millennial population there are a few things that are substantially different than in previous years.
It is somewhat of a “given” that the Millennial generation, who have been saddled with college loan debt and a often times unpredictable economy are generally not positioned to purchase and own real estate. The urban rental market is thriving with the young, professional working generation. This generation has made up a large share of the rental market across the board.
The somewhat forgotten but equally large share of the rental market are the Gen X’ers. Nineteen million of today’s current renters used to be homeowners according to a new report from the Urban Institute. Some of those renters are the typical demographic of the older retirees who have chosen to downsize, but nearly a quarter (4.2 million) lost their homes due to a foreclosure during the housing crisis. The housing crisis changed the profile of renters in this country to a huge number of previous homeowner, living within their means, middle-agers.
About 11 million people were foreclosed on during and in the wake of the housing crash, according to Lawrence Yun, chief economist at the National Association of Realtors. Only about 2 million have returned to the market since. Stagnant wages also make owning a home a financial hardship for this segment of the market: Gen Xer’s incomes are at mid-1980s levels and the situation is more grim for those aged 45–54, whose incomes are the lowest since the end of the 1960s.
Many of these Gen X’ers purchased homes that tanked in value when 2008 hit. Imagine they bought a $100,000 home in Las Vegas in 2007. They put the standard 10 percent down, which was most of their savings. By the end of 2008, that same house was probably worth less than $70,000, and now they were stuck. IF they happened to lose their job in early 2009 and couldn’t make the house payment, they then lost their savings, the house and any future appreciation and equity. They also now needed rental housing to live in. Eight years later, maybe they have scraped together enough to make a new down payment, but more likely their credit is shot and they STILL need rental housing.
So what do Gen X’ers want in the homes they are renting? Because they have previously owned homes and might have had many “niceties” they have a more likely predisposition to have higher expectations. They typically want a larger home with the ability for a home office and this is generally more important than a formal living or dining room. They are looking for upgraded kitchens with lots of counter space, good storage for the personal possessions they have accumulated and energy efficiency to keep heating and cooling costs down. High-speed internet access is a must and often a large yard that is pet friendly is as well. They also look at proximity to job to save on fuel costs and or the ability to walk, or green commute.
For Property Managers, Gen X can be the new “golden goose” for your rental demographic. Keeping in mind that many are in re-building mode after past financial hardships, on paper they may not look as good to you as the Millennial, however think of the big picture. They fully understand the importance of credit worthiness, living within their means and generally have a better understanding of home maintenance, repair and keeping things up because they have the experience. They also might be seeking the stability in housing that they haven’t had since 2008 which makes them a viable candidate for longer-term leases.