Echo Boomers Outside of recent immigrants, if there is one group that apartment developers can rely on, it’s the echo boomers. However, many members of this group won’t rent until they can find a job.
“The demographics are closely tied to economics,” says Mark Obrinsky, chief economist and vice president of research for the National Multi Housing Council. “If you just graduated from college and it’s a good economy, the odds are greater that you will get a job. When the economy is bad, you see a lot more people staying in school or living at home with their parents.”
Because the bulk of echo boomers will probably hit the market at the end of the decade, Obrinsky thinks apartment developers have not really built for them yet. When echo boomers do arrive, developers say they know where this group will want to live. “They love being downtown,” says Bob Keller, whose company, Keller Real Estate in Madison, Wis., builds apartments in downtown Madison. “It’s where all the action is with the bars and restaurants.”
Otherwise, developers are basically guessing at what echo boomers want. But companies that currently build for college students, like JPI, a developer and manager of multifamily properties based in Irving, Texas, may have some good ideas about what this group wants.
These renters will develop preferences for more luxury items, such as hardwood floors, in-unit washer and dryers, fitness centers, pools, game rooms, movie theaters, and even tanning beds, according to Kimberly Fiala, senior vice president and market research partner at JPI.
Some developers, like Keller, even kick around the idea of building smaller apartments in an effort to make downtown living more affordable. But most people don’t think this will reduce expenses that much. “You can pull out the pool and other amenities, but it does not make a big difference [in overall cost],” Fiala says. “Unfortunately, when you are going to urban areas, the price of land is extreme.”
