Although the recovery has begun, there are several indications that it will be a rare ‘jobless’ one. This has many implications for the multifamily and single dwelling rental sector with regard to occupancy. Simply, in areas with a recovering local economy and good job growth, there will be more people renting.

In Fannie Mae’s annual housing survey, there were some surprising outcomes. Two-thirds of people still regarded homeownership as a goal and good for the economy, but 56 percent of homeowners did not expect their financial picture to improve over the next year. Conversely, 56 percent of renters thought just the opposite, and expected improvement.  Other renters’ views on renting and homeownership were:

• Nearly eight in ten renters (79 percent) participating in the survey believe that renting has been positive for them and their families.
• Three-quarters of renters (75 percent) believe that owning makes more sense than renting, because it protects them against rent increases and is a good investment over the long term.
• The two most common reasons cited by renters for choosing to rent instead of buy are: the belief that their credit history is not good enough to qualify for a mortgage (54 percent) and that they would be unable to afford the purchase or upkeep of a home (47 percent).
• Nearly seven in ten renters (67 percent) plan to buy a home at some point in the future.
• A majority of renters (70 percent) think it is harder to buy a home today than it was for their parents’ generation.
• Less than half (44 percent) of those who currently rent said they would buy a house if they were to move
• 23 percent said they would purchase a new home later than planned

Many communities across America are discovering that our sons and daughters have learned an important recession lesson.  Go where the jobs are. That is exactly what they are doing. Fannie Mae’s annual housing survey reveals that they are a lot more cautious, are highly concerned about the volatility of homeownership expenses and are delaying a home purchase.  For the apartment industry this is all good news.

An elevated consciousness now directs us to weigh the impact on the planet of our lifestyles. Long daily commutes that exascerbate our personal carbon footprint also add stress in two-working parent households.  Young families are realizing that suburban life is a lot less convenient when all the tradeoffs are considered.

As companies consolidate in and around urban centers, more jobseekers will be following those jobs and a good percentage will be renting. This cautiousness seems to be more than just a popular trend. Financial advisors warn that although owning a home may be appealing, it can also become an economic trap.  In fact, the cities with the lowest percentage of homeownership also have the greatest economic opportunity from a jobseeker’s standpoint.

Richard Florida, "Homeownership is Overrated"

In an article published in the Wall Street Journal in June, author Richard Florida wrote about the results of a University of Toronto study in which he was a participant:

“Far too many people in economically distressed communities are trapped in homes they can’t sell, unable to move on to new centers of opportunity. The cities and regions with the lowest levels of homeownership — in the range of 55 percent to 60 percent like L.A., N.Y., San Francisco and Boulder — had healthier economies and higher incomes.”

Florida wrote the recently published book, The Great Reset: How New Ways of Living and Working Drive Post-Crash Prosperity, and also serves as director of the Martin Prosperity Institute at the University of Toronto. He and his colleagues studied homeownership patterns and how that related to the economy and the job market.  They concluded that renting can be advantageous to jobseekers during an economy with high unemployment.

In the third quarter of 2008 the Census Bureau found a third of all housing units (almost 37 million) had no mortgage. These owners obviously have better options, but for the other two-thirds of homeowners with a mortgage, joblessness has become the major concern. Florida believes many of these owners would be financially better off without their real estate.

For the younger crowd of jobseekers, attitudes about renting are changing rapidly. They are watching their parents, saddled with what was once considered a riskless investment vehicle, struggle to make ends meet. They are not impressed and they are making other choices. One of them is moving to urban areas.

Attitudes about the value of ownership, leanings toward a simpler, more sustainable lifestyle and the lure of the urban world are all having an impact on a large segment of the population.  The Bureau of Labor Statistics reported in early June of 2010 that unemployment for the 16 to 24 age group was still in the mid-twenty percent range. With over two million college graduates currently unemployed, those youthful jobseekers are competing against people who have an education and job experience.  A lot of them have gone from the dorm to their parents’ home.

Michael Brody, a 2009 college graduate works but is looking for a job as a writer while blogging on the site “The Fiscal Times” … just until that opportunity arrives, of course. He had this advice for youthful jobseekers: Make friends with your parents. Great advice for recent college grads, but I would add one thing.  While you’re living with mom and dad, save your money. Do your research and see which cities have the most opportunity, then move and rent an apartment. If it doesn’t work out, you can count on your Mom to send you a plane ticket home.

Other Articles of Interest:

• Renters, Get Set, Go Green!
• Managing Renters’ Mobility
• Honor Our Veterans: Get Out of the Car