Housing industry responds to more adults living with parents - Ahwatukee Foothills News: Real Estate

Housing industry responds to more adults living with parents

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Posted: Saturday, June 14, 2014 9:45 pm | Updated: 12:47 pm, Sat Sep 6, 2014.

The Great Recession may be in the rear-view mirror, but its effects on household formation are still being felt. According to researchers, 1.2 million more adults live with their parents than just eight years ago.

The trend, which has young adults boomeranging back into their parents’ houses for credit- and job-related reasons, not only is changing the way people live, it’s also creating a significant impact on the housing industry.

For one thing, we see it reflected in housing design. House layouts designed for multiple generations co-existing under one roof are placing a heightened priority on more private areas for independent living. Some multi-generational layouts offer two master suites, while others feature a den or a family room that can be converted into a bedroom and bathroom on the first floor. Still others include additional flex spaces and separate casitas to accommodate a wide variety of living situations.

Second, industry watchers say this demographic shift is causing significant pent-up housing demand that is due to be unleased. Even so, the effect on homeownership rates and construction starts most likely will not be felt by the homebuilding industry immediately.

“Most of these young adults will rent first, except for those who have taken this time living with Mom and Dad to save up for a down payment,” writes Chris Porter, chief demographer for John Burns Real Estate Consulting, in a recent building-market intelligence newsletter.

According to Porter, nearly 4 percent of U.S. households had an oldest child aged 25-34 living at home in 2012, compared to 2006, when 3 percent of households fit this category. While the jump from 3 percent to 4 percent may not seem significant, it amounts to the addition of 1.2 million households living in this configuration since the end of the recession.

And, says Porter, the trend is not confined to people under 35. The share of U.S. households with an oldest child aged 35 or older living at home is around 3 percent and has been rising, as well.

Influenced by declining employment, rising college enrollment and a tendency to put off marriage, this Millennial generation is considered a major contributor to sluggish household formation rates — a reality Porter doesn’t foresee changing any time soon. “Today’s young adults have achieved homeownership at a lower rate than their parents at the same age, and we believe that they will continue to do so for some time.”

• Andy Warren is president of Maracay Homes, the Arizona subsidiary of the Weyerhaeuser Real Estate Company. He serves on the board of directors for the Home Builders Association of Central Arizona and Greater Phoenix Leadership; as well as the board of directors and as an Executive Committee member with the Greater Phoenix Economic Council. He is also an active member of the Urban Land Institute.

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Kyrene Akimel A-al Middle School

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Kyrene Akimel A-al Middle school Principal Mike Deignan poses with students in front of the school sign that is advertising their "A" rating.

Kyrene Akimel A-al Middle School has been part of the Ahwatukee area since 1992, offering each of its Rattlers an enjoyable schooling experience from the morning bell to the ending bell.

According to its website, the name of the school is from the Akimel O’odham language and it means, “Children of the River.”

Principal Mike Deignan said the school offers sport activities and a learning lab before school starts, which provides students time before school to seek extra help with work completion or tutoring.

“That keeps our students involved with a lot of things, between the sports and the learning lab,” Deignan said.

For more information, visit www.kyrene.org/aki.

• Compiled by Daniel Ochoa.

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