If you read real estate news (I don’t know why I ask that — no one does), you know that about a million real estate reporters have written on the “phenomenon” of Millennials not buying homes — specifically, that our broke asses are still living with our parents and can’t afford the 20 percent down that the American housing market requires for a reasonable interest rate.
Bashing Pontificating on the Millennial Generation is a favorite pastime of seasoned economic and social commentators these days, and the opinions on our real estate preferences are varied. Some think we can’t afford houses; others think we can but don’t want them; and still others think that we actually are buying houses but no one is noticing. Their opinions on how we’ll impact the housing market because of our purported lack-of-ownership lifestyle are also widely varied. Some think we are killing the economy, while others think we are going to be fantastic in the long term.
So, if everyone has all of these widely varying opinions on the housing market, is it possible that they are all wrong?
I mean, we are broke. Our parent’s generation sealed that one up for us with their unfunded wars, inability to reform entitlements and pathetic regulation (and deregulation) of the economy that led to a housing bubble that burst with wild abandon, leaving us 20-somethings wondering where the hell we are going to find a job (Yay, graduate school!).
But look: Is it possible that the economy is only partially the point, here? Is it instead possible that our lifestyles, wildly rocked by an unpredictable housing market and an even less predictable job market, have simply changed our preferences?
Most of these articles are predicated on the idea that 20-somethings are completely unable to make solid financial decisions based on our circumstances. They assume that while economic conditions have changed, our desires have stayed the same — that we all still want that four-bed-two-bath house in the ‘burbs with a tree-lined driveway. What they have failed to recognize is that this shift in our circumstances has forced a logical, and predictable, shift in preferences.
Yeah, the economy is different. That means it’s pretty hard to get a job right now. I get it. But that also means that Millennials have to be able to pick up and move when we do find someone willing to pay us for our labor. And you know what you can’t pick up and move? A house. Even if we were capable of slapping 20 percent down on a $300,000 mortgage, we wouldn’t — our lives are too mobile.
And our parents say, “With what you are paying for rent, you could pay a mortgage!” And financial analysts say, “But you aren’t building equity!” And we say, “STFU.”
The idea that renting is for suckers is simply not conventionally valid. That taking out a mortgage makes us immobile (and that immobility is bad) is not only physically true — it’s financially true. At this point in our lives, it is simply not wise for most of us to financially tie ourselves to a single, large investment. Our lives, by virtue of the economy and other circumstances completely beyond our control, are simply not very stable. Our money might need to go in a completely different direction tomorrow, and having it tied down to a mortgage doesn’t allow that to happen.
Some guy at Trulia calls this “Peter Pan Syndrome” — we rent because we don’t want to grow up, settle down and have a dog, damn it. But that argument is based on the idea that we still think buying a home is part of “growing up.” Instead, I think it’s a tired concept forced on us by a generation who wanted to own homes so badly that they bought homes they couldn’t afford and screwed us all. Is it not a mature decision to be mobile enough to take the best job that we can get, regardless of where it is? Is it not mature to keep our capital mobile so we can make better investments later?
He also says that renting is the best option for “satisfy me now” Millennials (gag) who suffer from “wanderlust.” But I think that misses the point, too. Sure, maybe there was some part of me that picked up and moved to New York because it sounded like a sexy idea, but in reality I moved here because I thought I could get a job. All the wanderlust in the world couldn’t have made me move to Hawaii, regardless of how awesome that sounds, because I couldn’t get a job there.
It’s time for analysts to stop pretending like Millennials are simultaneously poor enough to have to live in our parents’ basements while also being rich enough to travel the world.
There’s also this seemingly mind-boggling idea that Millennials prefer not to live in suburbia, and would instead prefer to be closer to downtown and even (gasp!) give up having a car. A report by Nielson shows that 62 percent of Millennials surveyed “prefer to live in the type of mixed-use communities found in urban centers, where they can be close to shops, restaurants and offices.”
Opinion writers galore will tell you that it’s because we are materialistic and would prefer to spend money on brunch rather than plants to beautify our half-acre lots. But what if it’s just because we value proximity and the options it allows? Is it not possible that our preferences are logical instead of selfish and vain?
Here’s the skinny. If I can save an hour and a half per day on commuting back and forth between my suburban paradise and my urban office, that’s an hour and a half I can spend doing literally anything else. I could work for another hour without losing any real time, I could go to dinner with a friend (by walking to the restaurant!) or I could spend quality time with my husband. All of these things are better than staring at the back end of the car in front of me and cursing his inability to merge (“It’s called zippering dumbass! LEARN IT.”).
This crazy idea that our preferences are simply different and not somehow worse has escaped modern-day commentators. They have to find some selfish reason “Generation Me Me Me” wants to break with social conventions and live in a different way than our parents. But there really isn’t one — we just expect (and want) different things from life. As soon as they wrap their minds around that, maybe we can have a real conversation about the future of real estate.