Posted: Jan 30, 2012 10:00 PM by Matt Stafford
Each generation of young professionals has its differences, and its own set of problems. The life-long plan so many Americans have used -- of getting a job, buying a house and paying off a mortgage -- is certainly changing; it's more difficult to get a loan, and some people would rather rent.
"Without 20 percent down it's very difficult to get a loan today," explains Fred Crowley, senior economist with the UCCS Forum. "A typical house around here is about $200,000, and you've got to come up with $40,000. That's a lot of money."
"If you've never owned a home before it's almost impossible, as a young adult, to come up with $40,000. So, the choice is: rent," says Crowley.
In Colorado Springs, before 2011, it had been at least a couple of years since any new multi-family apartments had been built; now that's changing.
"Certainly there will be different kinds of housing activity this year and next," says Crowley. "We're going to see a move to a large number of multi-family units; apartments coming online this year."
"In terms of demographics, a lot of younger people do not want to make a home ownership commitment yet," says Fred Vietch, vice president of commercial development for Nor'wood Development Group, based in Colorado Springs.
Vietch says these days, people working their way up the corporate ladder seem to do a little more moving around before settling down. His group is one putting in new units in El Paso County.
"A lot of people want to get out of the home, home maintenance, and may choose to rent short-term," says Vietch. "Apply that equity towards other things."
However, it's not pushing everyone to rent; the single-family housing market has seen growth locally too, despite poor 2011 national numbers.
"There were actually more single-family permits (locally) in 2011 that there were in 2010," says Crowley. Hopefully it's a good sign.
"Push comes to shove; multi-family is growing a little bit faster right now than single-family," says Crowley.
"It's going to be good for the consumer to have more choices, so, I think ultimately it's going to be good for the community."
Only time will tell.
Here's advice from an economist on whether to buy or rent. Crowley says it comes down to job security; if you feel like you have it, it's a great time to buy because of low mortgage rates. If you aren't sure, he says you may be better off to rent.