Home > Mortgages > Next Generation Homebuyers Seek Function Over Features

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In the early 1990s, my family built a home in the quiet suburb town of Shrewsbury, Mass. The 4-bedroom, brick-front Colonial had everything you’d expect it to have: a living room and separate sunken family room, a formal dining room, bathroom immediately to the right of the entrance, a home office to the left, a spiral staircase, a big kitchen with marble counter tops and a two-car garage. For my parents who’d emigrated to the United States just ten years prior, this home represented The American Dream with all its pride and glory.

Jumping ahead twenty years, today’s first-time homebuyer has a vastly different vision of the perfect home. Many snicker at the McMansions and traditional homes their parents lusted after. What’s changed? It’s partly a matter of mindset that’s shifted since the Great Recession. Younger would-be homebuyers equate oversized homes and their accompanying million-dollar price tags with the real estate crash. “I think that what young people are realizing is that a home is not necessarily an investment,” says Zac Bissonnette, a young homebuyer in his early 20s and author of Debt-Free U.  “What I looked for was, primarily, something where the numbers made sense: something that, even without appreciation, would be a good investment over the long-term in comparison with renting. That’s the smart way to buy a home, and that’s the way I think more young people are inclined to look at it.”

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David Senden, principal at KTGY Group, an architectural and planning firm based in Irvine, Calif., agrees.  “It has become obvious to Gen Y that the generations that came before did not have all the answers,” says Senden.  “The Boomers haven’t got it all figured out. Gen Y is much more interested in following its own path.”

That path involves choosing homes with functionality over flashy features. Risa Teksten and her husband, both in their early 30s, recently bought their first home in the Boston, Mass., area.  They were turned off by the over-done homes and attracted more to the smaller homes that just needed some extra TLC. “We looked at some homes that had souped-up kitchens, spas in their master baths…but we felt like there was ‘too much house’ that would force us into allocating more budget for furniture rather than value-add improvements,” says Teksten. The couple ended up buying a home built in 1958 with smaller rooms and an open living plan. They’re looking forward to making some DIY upgrades including upgrading the kitchen cabinets, adding tiles and a fun deck outside.

New homes in development are also being designed to meet the growing demands of young, future homebuyers. Marc Spector, principal with architecture and planning firm Spector Group based in New York, says he’s receiving requests for homes with smaller square footage and fewer walls between public spaces. “As far as a floor plan goes, the cookie-cutter model is all gone,” he says. “The internal planning of houses has changed where you have virtually a clean open place for the public spaces…separated by furniture and lighting.” The idea is that with an open space, homeowners can better furnish and customize their homes to meet their needs. “Builders and architects are offering a variety of set-ups and looks and feels, so people can feel [the home] is more personal to them and yet still feel proud of what they’re getting,” says Spector.

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Eco-friendliness is another must-have. Homes today are being built with a greater focus on energy efficiency to attract some on-the-fence first-time buyers concerned about the high cost of maintaining a home. “We’ve done our best to reduce cost through sustainable design,” says Spector.  The group is introducing solar and geothermal technologies to their new homes, installing better insulated windows and sealing basements and attics.

Senden, whose firm is based on the West Coast, sees a similar trend. “The attitude now is to impress your friends by how much energy you save by using photovoltaic panels, or how much rainwater you capture to water plants. Conspicuous consumption has been replaced with a utilitarian stance aiming to conserve, reuse, and be thrifty,” he says.

Energy-efficiency was a deal-maker for 23 year-old Lilly Pritula, who is about to close on a new home around Ann Arbor, Mich., after a long and arduous 10-month search that involved looking at nearly 60 properties. She ultimately chose a well-built, 1,100 square foot home with no need for repairs. “Homeownership comes with a lot of responsibilities already, so choosing a home as a young buyer means that I am more concerned with how energy efficient and stable the place is, not how many updates and bells and whistles that it comes with.”

Image: joiseyshowaa, via Flickr.com

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