Now Boomers prefer to rent and here’s a tool to convince them otherwise
What is going on with the American dream? That American dream once involved several ideals and one of them was always ownership of a home.
As we know (and discussed before) Millennials, the next generation to come to the forefront, are not interested in home ownership and prefer to rent. Now it turns out, Baby Boomers feel the same way.
Renter growth is at the highest it has been in the past 30 years. Home ownership is at the lowest it’s been in 25 years.
Obviously, for a real estate professional who sells homes, this renter mindset has to change. There’s a map-based real estate search tool that can help you do just that.
Here’s some more of the surprising news. Rents are at all time highs. Why? Because the demand for rental units is huge.
We already know Millennials want to rent instead of own. There are a number of reasons why – the preference to live in cities, high student loan debt, concern about jobs, the mess their parents encountered with home values during the Great Recession.
But what about Boomers? Apparently they feel the same way. Families or married couples ages 45-64 accounted for twice the share of growth in rentals as younger households, as discovered in a study by the Joint Center for Housing Studies at Harvard University.
What has this done to home ownership? It’s dropped from 69% in 2004 to 63.7% today. And by all indications, it may drop further.
Wow. Talk about a paradigm shift. Years ago, a real estate agent did not have to educate consumers about the benefits of owning rather than renting. It was a given.
But, it seems like a re-education process has to take place.
The solution? Well, owning a home for the most part is better than renting. But you need to pull out more evidence to convince people to the contrary. (Also, what better time to convince people to invest in rental property?)
Take the SpatialMatch real estate map-based search tool for example. This tool is basically a gigantic database of MLS listings, real estate data, local businesses, schools, restaurants, transportation systems, municipal boundaries and dozens of layers of other hyper-local information.
With this tool a real estate agent can pull up properties from MLS and then show how they are positioned on a map in relation to amenities and key geographic locations.
So for example, say you found a Boomer couple looking for a place to live. Maybe he likes to golf. She likes yoga. But they are reluctant to buy.
Location is your leverage. With SpatialMatch, you can show these Boomers that you have some properties that are located just three miles from the nearest golf course and one mile from a fantastic yoga studio.
You can also show them that there are no rental properties or no decent rental properties anywhere in the vicinity.
With today’s still low mortgage rates, why not buy this home rather than rent one miles away in a less desirable location?
With the SpatialMatch database, you can also get access to information on recent home sales and market trends. Show them that while people are wary of buying a home, the home values in the area are going up. So obviously somebody’s buying and home owners are seeing an appreciation in assets.
Maybe they are going up by 5%. You are not going to find bank CDs that are going to give you a return of 5% in today’s market.
And, consumers are only going to find it is more and more expensive to rent a property while they pour money into somebody else’s pocket. Landlords then use their money to get a better return on their dollar.
Sure, it’s a tough environment out there. Trends are difficult to buck. Some people got burned on their homes for a few years. Some went into foreclosure.
That was then. This is now. And it’s smart to use the real estate technology of today to address the new mindset of today.
To read an article about the trend in rentals for Boomers, click here.
SpatialMatch real estate search tool
