April 1, 2019
Last week we discussed whether or not we were in a real estate bubble. (Highly unlikely.) This week we discuss something Orion’s brokers are very tuned in to: what borrowers want. RCLCO published its 2018 Housing & Community Preference Survey polling over 3,000 adults in the U.S. that have incomes over $50K, and either purchased a home in the last year or have intentions to purchase a home in the next 12-24 months. The survey targeted fifteen metropolitan areas, several of which Orion lends in, and found a demand for broader range of home types and sizes than are currently being provided in the industry.
Key community characteristics vary by age and household type. Most consumers are looking for a place that provides value and high-quality housing product, communities that reflect their success/achievements in life rank higher for younger consumers, while communities that facilitate a healthy lifestyle and provide social opportunities increase in importance as consumers get older. Orion’s brokers are seeing this as well.
As in the survey, many of our brokers’ clients are interested in a wide array of social and recreational amenities. Trails, fitness centers, trails, pocket parks, gated entries, and resort pools remain top amenity preferences. Reflecting the trends toward online shopping, providing accommodation for package receiving also scores high on the list, which is particularly important to younger consumers.
Families with children under age 18 represent 31% of all households in the U.S., but 38% of recent home purchasers. The survey shows that life events within families are some of the best predictors of when a household decides to buy a new home. Non-families (households without children at home) account for 69% of all households, and 62% of home purchasers. Marriage is an important home purchase trigger, with 68% of consumers purchasing their first home after they were married, and 35% purchasing within the first 24 months of marriage.
The type of home being sought varies of course by the type of household (age, family/non-family, etc.). While Master Planned Communities remain attractive to consumers of all ages including about 28% of households under age 35 to age 54; most are looking to upgrade in terms of quality, but younger and some middle-aged households are seeking larger homes and yards than they have now, while almost 40% of older 55+ households are looking to downsize to a smaller, lower maintenance home.
While nationwide 85% of new housing starts currently are for single-family detached homes, many market segments would consider other product types, including attached product, multifamily, or multi-generational homes. The overall interest in higher-density and attached housing is greater among those considering purchasing in a master-planned community.
The combination of greater interest in products other than conventional single-family detached, and strong interest in smaller homes, suggests that more consumers would purchase non-SFD housing products in greater numbers if they were more available and in the right locations, particularly in MPCs. Fortunately Orion has many programs that are tailored to this segment – as your Orion AE!