Interesting articles. In my peer group, there are really two types of people: those who want big houses, who are buying now, and those who want to get and stay debt-free, and have decided that getting 'just enough' house is one way to do that. The latter group is much bigger, but many of those folks are still renting very small apartments.
It will be interesting to see how/if this changes over the next 10-20 years. I was under the impression that most millennials are flocking to smaller places in cities, but maybe my perception is skewed by my own experiences.
Millenials are flocking to smaller places in cities because they are generally young, have no kids, and things like "proximity to good bars" is more important than "in a good school district."
That will change as they progress in life and start popping out kids, etc.
Circle of life.
Unless my friends , peers, and I are serious anomalies, I would be surprised if what you said will be true. Sure, most millenials are interested in ultimately living somewhere with good schools, but we are also very interested in living close to work and other fun stuff, in living in a low-maintenance place, and in avoiding large debts. We also mock the McMansions of our parents' generation, and have lived very frugally, both out of necessity (due to the economy) and because of high student debt loads. Many don't even want children.
Besides my one friend who wants four kids and grew up very poor, I can't think of a single friend (even the spendthrift ones) who has expressed a desire for the McMansion lifestyle.
Also, proximity to bars can easily be found in suburbs and rural areas. Short commutes, the ability to live without cars, and a thriving arts and culture scene are the things keeping my friends and me in cities.
I'm 33. I'm probably not a lot older than you (I'm the bleeding edge of the millenials, the "Oregon Trail" generation if you will). Trust me, you think you have it all planned. You don't.
http://www.youtube.com/watch?v=O1Z91YkPatw
We are virtually the same age. I'm also an Oregon-trail millennial. So we are probably equally as good/bad about predicting what our peers will do :).
I can tell you, however, that barring unforeseen and extreme circumstances, there is no way in hell I will ever have a McMansion. I could have comfortably mortgaged myself into one quite some time ago, but have preferred to rent smaller spaces, even as I've added family members. Even when I've considred buying, I have never once been tempted by a huge home.
I would guess that most people who are regulars around here do not suddenly shift to wanting McMansions many years after their entry into adulthood. We want FI and/or ER instead.
I'm not talking about YOU, I'm talking about OUR GENERATION. McMansions? Probably not for most of us, but are we, as a generation, going to continue to flock to small condos in the city near indy coffee shops? No. Hell, my own street is currently undergoing a revolution of sorts as all the old people who own homes last udated in 1975 either die off or move to assisted living, and sell their older, modestly sized (2000sq ft, +/-), single family homes to 30-somethings with kids and we are all remodeling them, etc, because even though they're smallish and outdated, they're in a great school district and we have young kids, so that's what we do.
I understand that we are talking about our generation. My response about myself was a response to your statement: "Trust me, you think you have it all planned. You don't." The "you"s in those sentences seemed to be aimed directly at me and not our entire generation.
And I don't really see how either of our anecdotes proves that one of us is right and the other is wrong. Of course you, living in the suburbs, are going to see additions in the suburbs, and I, living in the city, am going to see hundreds of successful tiny condo developments in the city. Neither proves the point, although I do think it is worth pointing out that the house remodels you mention are not equivalent to upgrading to a bigger home. Additions, sure, but can you seriously say you've seen more new home
additions than new condos? I doubt it.
My overall point about your argument was that it is by no means a guarantee that as a generation, millennials will all start popping out kids and moving to giant houses in the suburbs. I know plenty who won't go that route. Indeed, there has been a large growth in cities and a large decline in the birth rate as millennials have become adults when compared to previous generations. That alone suggests that we shouldn't assume that millennials will act just like boomers did. They already act very differently than their boomer parents.
Moreover, many surveys and studies have predicted that the growth of cities will continue to outpace the growth of suburbs in the future. For example, see
http://www.nielsen.com/us/en/insights/news/2014/millennials-prefer-cities-to-suburbs-subways-to-driveways.html. The surveys show that millennials care about just what I mentioned: the environment and car-less living, a thriving arts and culture scene, shorter commutes, and not having huge mortgage debts. Many also express a desire to continue living in cities in the future.
So sure, plenty of people will follow in their parents' footsteps and move to the suburbs where every kid has its own room and there's a guest room and man-cave. But, if I had to make a bet, I'd bet that when compared to previous generations, a much larger percentage of millennials will choose smaller and more urban homes than our parents.
I'd love to be proven wrong though, as that means most of us on this thread would get much better deals on our eventual in-city home purchases! The prices in my city right now is insane because of millenial demand.