Millennials and boomers are key to residential market in 2016

By Dennis Rodkin

 

A few Chicago neighborhoods—including Mayfair, where this home is for sale—have both a high concentration of baby boomer-owned homes and a lot of house-hunting activity online by millennials.

Photo by Redfin

As one generation looks at retirement and the other sees the kids-and-family phase of adulthood coming, both are being watched closely by Chicago real estate agents.
Baby boomers heading into their sixties and millennials in their late twenties and early thirties are the "bookend generations, who together can make a big difference in how Chicago's housing recovery goes this year," said Jonathan Smoke, the chief economist for RealtorDOTcom, after speaking at a recent Chicago Association of Realtors market outlook event.
Because they're the nation's two largest adult population groups, their moves affect the real estate market in almost every U.S. city. Yet Smoke said each will play a particularly large role in Chicago.
Millennials are the demand side: Last year, people between the ages of 25 and 34 years old took out 41 percent of residential mortgages in the Chicago area through the end of October, compared to 35 percent nationally, Smoke found. Millennials are increasingly turning to buying homes as their incomes rise, their families grow, and the cost of renting rises, he said.
Baby boomers who are in their sixties, or getting there, are the supply side: When they opt to sell their longtime homes, they help loosen the market's problem with super-tight inventory. In the city of Chicago, fewer homes were on the market at the dawn of 2016 than at any time in the past nine years.
Getting baby boomers to let go of their homes "is definitely going to be important, but it's not always easy," said JoEllen Davis, an @properties agent. "They're trying to establish what the next chapter in their life will be and where it will be," while at the same time wrestling with "what to do with their 40 years of stuff."

Read More