In What’s Hot and What’s Not in Phoenix Residential Real Estate, we noted the market popularity of multigenerational-capable homes—those with guesthouses, casitas, or multiple homes within one lot. As promised, today’s post will dive a bit deeper into why these properties are in such high demand, which comes down to two separate trends in their own right.
Housing Trend #1: A Movement Away from Assisted Living
Continuing care retirement communities (CCRCs) have long been a popular way to accommodate parents and older relatives with an aging-in-place structure: moving from independent living to assisted living to skilled nursing without having to move to a new community. Unfortunately, the well-publicized health threats from COVID-19 have heightened the real and perceived risks for elders living in such circumstances. As a result, many families have chosen to take moms, dads, and others out of CCRC facilities and bring them home.
Housing Trend #2: Adult Children Moving Back Home
On the other end of the age spectrum, job losses, economic uncertainty, and college closures have driven a significant number of millennials back to the nest. In July, the share of 18- to 34-year-olds living with their parents grew to a majority—at 52%, the highest since the Great Depression and up from 47% in February, according to Pew Research Center. Note that this trend also has an impact on demand within the multifamily market, as it takes many millennials out of prospective tenant inventory.
Both of these trends have been caused and accelerated by the coronavirus. Assuming the pandemic becomes mitigated in the coming months—whether through vaccines, therapeutics, or burning out of the virus—we could eventually see a reversion to assisted living within the elder population. While the economy is in recovery mode, that aspect is a bit trickier—as far as when adult children will feel financially secure enough to venture back into renting on their own or buying homes in a pricey market.
Even within a seller’s market, homeowners who have multiple living accommodations can expect higher-than-usual demand, particularly if they have separate kitchens, offices, and other independent spaces that allow for some breathing room between generations. Conversely, if you are looking at buying a multigenerational-capable home in the current market, recognize that it is highly competitive and you will need to be patient—and be ready to pay top dollar.
Strategic Seller Series
Learn how to sell your current home or buy your next home—at the right price and right terms—through our Strategic Seller blog series:
- Understanding Appraisals in a Crazy Market
- How to Avoid a BOM During the Phoenix Housing Boom
- Ways to Position Yourself as the Most Attractive Buyer, Part 1
- Ways to Position Yourself as the Most Attractive Buyer, Part 2
- Tight Housing Markets Require Focus and Strategy
As always, there are opportunities for sellers and buyers in various pockets and property types within the Greater Phoenix market. To enlist the help of professionals who can help you formulate a strategic plan, contact R.O.I. Properties at [email protected] or 602-319-1326.