04 Jan The ‘Reality’ TV Effect
‘Reality’ TV is usually considered ‘throwaway’ media – something that’s fun to watch, but doesn’t have any real effect on the real world. But, in the world of Real Estate, that’s not necessarily true. We’re all familiar with the Real Estate Reality TV shows – showing people shopping for unbelievably priced dream homes or flipping fixer uppers in what seems like a matter of days with a team of professionals – but what you might not be aware of is the impact those shows are having on builders trying to sell starter homes. No, these shows aren’t giving potential first time homebuyers a ridiculous idea of what is ‘reasonable’ in a new construction starter home – they’re pushing them away from new construction altogether.
Many of the most popular real estate reality shows showcase the process of renovating or ‘flipping’ a home. And, while they do show the stress and difficulties many homeowners face while going through the ‘flipping’ process, these shows do tend to sugar coat the process and make it look much more appealing. They have also opened up what was once a sort of ‘niche’ concept – paying less for a fixer upper and investing time and labor to make it your own – to a much broader audience – millennials.
The millennial appeal of flipping a house isn’t hard to understand. Time and time again, we hear the old cliché ‘location, location, location’, and by seeking out fixer uppers rather than new construction, many millennials are finding themselves able to afford to live in or near the hottest areas in their cities, for a fraction of the price of new construction. And, for a generation that is known for focusing on themselves and sees the value in customization, overhauling a house to get it just the way you like it is a very appealing concept.
So what does this mean for new home construction? If millennials are going after close-in fixer uppers and resales, who is going to buy the ‘starter homes’ being built in further out suburbs? Surprisingly, their parents. Empty Nesters are looking for something completely different in a home than their millennial children. They don’t necessarily want to live closer to urban cores, and have always understood the appeal of suburban living (the suburbs are changing, anyway!). And, if they have the option to downsize to a smaller, new construction home that still fits the needs and demands of a modern lifestyle without uprooting and moving out of the communities where they raised their children? A brand new ‘starter’ home becomes a brand new ‘fresh start’ home.
There is one problem with this trend. On the whole, Millennials don’t want ranches, so all of these new construction homes are multi-story. For the young empty nester, this isn’t that big of a problem, they’re still able to navigate stairs without any worry. But traditional ‘empty nester’ homes have been designed to allow the owners to age in place. Think one-level living, wider doorways, thoughtfully designed kitchens. So as we’re seeing this trend unfold, a question is raised – will those empty nesters buying these ‘fresh start’ homes stay there long, or will they end up transitioning into a more convenient living environment before they retire?
This blog is based on a presentation we had the pleasure of attending at the CREW Atlanta meeting last his month. For more on CREW please click here to visit crewatlanta.org