The Lost Ones: How Missing Households are Expected to Boost the Market
Similar to Montana versus the rest of the United States, the households ranging in between ages 18-34 have a delayed response to the market as the more periphery age groups feel the certain trends. Prior to the housing bust, 1.1 million households were formed annually. During the economic dip, only about 450,000 households formed each year. This ‘backlog’ of home formations over the three year bust totaled to 2.4 million households that are not currently showing up in the stats but, in theory, they are lingering out there awaiting the proper moment to re-enter the market.
These households are the Missing or ‘Lost Ones’ that are expecting to begin re-entering the market… only no one can say just when. In the meantime, the Lost Ones are coping through a number of different living solutions—the most prevalent being the trends of living with mom and dad post grad. Pre-recession, 27% of that 18-34 age group lived with their parents. Today, 31% have not left the nest.
The Lost Ones, the 18-34 age group of potential home buyers, have made a slow recovery as of yet and that is expected to continue. These are first-timers, newly-weds, new families, new jobs—the lives of the Lost Ones are less settled until they find their focus. As a Realtor, this means there is a significant market gap not being catered to in a way they respond very positively so encourage the young people in your life to attending first-time home buyer classes, find tools that speak to their quick tech driven lives, and in the end, realize these are stats that we just do not know yet and converting the Lost Ones to home buyers may just take a prolonged amount of time.
Stats Found at: http://www.inman.com/2013/07/24/missing-households-represent-big-source-of-pent-up-demand/