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The New American Dream: Why People Are Choosing to Rent

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As more people choose to rent apartments over buying homes, North American Properties - Atlanta (NAP) has released “The New American Dream” SlideShare that looks at who the new renter is, what factors are contributing to this trend and what it means for the future of multi-housing. NAP first became interested in studying this phenomenon after receiving a flood of inquiries for its luxury rental property, Haven, at Avalon, a $600 million mixed-use development opening Oct. 30 in Alpharetta, Georgia.

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The New American Dream: Why People Are Choosing to Rent

  1. THE NEW AMERICAN DREAM WHY PEOPLE ARE CHOOSING TO RENT
  2. Once upon a time, the American Dream looked something like this...
  3. Not anymore
  4. Today, more people are choosing to move out of their homes...
  5. and into apartments Today, more people are choosing to move out of their homes...
  6. Home ownership has reached a 19-year low U. S . CENSUS BUREAU
  7. In May 2014, the national apartment occupancy reached 95% for the first time in 6 years.
  8. Nearly half of all renters are former homeowners. This percentage continues to grow despite record low home prices. 33.6% 35.1% 44.1% 2012 2013 TODAY
  9. So, what do we know about these new renters?
  10. They are a new class of consumer who are…
  11. Renting by Choice Looking for Technology Local Restaurants Walkability Urban Feel
  12. 6 of 10 people would sacrifice a bigger house to live in a neighborhood that features a mix of residences, stores and businesses.
  13. Millennials tend to place more value on amenities than on square footage. Some Desirable Amenities Include… ✓ Wi-Fi Connectivity ✓ Communal Spaces ✓ Walkable Locations ✓ High-End Fitness Center
  14. This is a generation of online social networking and herding—or meeting at a social gathering in a moment’s notice. Hey! We’re meeting at Starbucks in 5 mins. Want to join? Sure! See you soon!
  15. They value community, ideas, information and a healthy work/life balance.
  16. Millennials who want to live in an urban environment 77%
  17. They want to be within walking distance of peers, work, services and hangout spots.
  18. Millennials are also waiting to get married, start families and buy homes.
  19. Married adults ages 18-34 in 1983 46%
  20. Married adults ages 18-34 in 2013 30%
  21. Married couples ages 18-34 with children in 1983 39%
  22. Married couples ages 18-34 with children in 2013 29%
  23. 36% Americans under age 35 who own a home, the lowest level on record
  24. Millennials’ attitudes toward homeownership have changed because of the housing crisis and recession in the mid-2000s.
  25. Many saw their parents lose a significant portion of their savings due to decreased home prices and have since lost confidence that homeownership is the way to develop wealth. HOUSE FO R E C L O S E D
  26. The “Bank of Mom and Dad” is closed. Since their parents must rebuild their retirement portfolios, millennials are not getting the same down payment assistance that the generation before them received.
  27. In addition, many 25- to 34-year-olds have taken on consumer and educational debt and are now unable to qualify for a mortgage.
  28. Federal student loans outstanding have shot up 360% since the start of the recession, rising from $98 billion to $453 billion in just four years. $98B $453B 2007 2008 2009 2010
  29. Rentership rates for households aged 30-64 are the highest they’ve been in 30 years.
  30. They are also baby boomers who are trading in their single-family suburban homes to be closer to urban centers.
  31. 100% Estimated increase in renters ages 65+ from 2010 to 2013
  32. These are people who can afford to buy but choose to rent.
  33. 50% Over half of renters in U.S. metro areas could afford to own a home
  34. Need more proof?
  35. Look at the average person interested in renting at Haven, a luxury rental community at Avalon, a $600 million mixed-use development in Alpharetta, GA opening October 2014…
  36. Under 35 31% 51+ 34% Interested Renters by age 34% Interested renters are equally distributed by age. 36-50
  37. of prospects currently own their homes 47%
  38. HOUSE FOR SALE but are considering a move for amenities and the lifestyle luxury rentals offer.
  39. $126K + 31% 28% No Answer 23% 18% Interested Renters by annual income >$75K $76K-$125K+
  40. “In many cases, people are abandoning The American Dream of homeownership and choosing luxury rentals because of walkability and accessibility to desirable amenities that high-end mixed-use developments offer.” RICHARD MUNGER PARTNER AND V.P. OF DEVELOPMENT NORTH AMERICAN PROPERTIES
  41. A shift in attitude and values is contributing to more renters entering the market.
  42. “The rental economy is part of a growing post-recession movement to value experiences over possessions.” CLAIRE CAIN MILLER THE NEW YORK TIMES
  43. Homeowners are often anchored to their neighborhoods…
  44. While renters have the ease of mobility as they enter different stages of life.
  45. Renters are also free from some of the daily stresses plaguing homeowners.
  46. They don’t have to worry about yard work, home repairs and unexpected maintenance expenses.
  47. They can simply enjoy what’s outside their front door.
  48. While homeownership may have its perks, it’s pretty hard to compete with this…
  49. AVALON
  50. PIKE & ROSE
  51. MISORA AT SANTANA ROW
  52. THE AMERICANA AT BRAND
  53. People pay a premium for this lifestyle.
  54. AVERAGE APT. SAN JOSE, CA MISORA AT SANTANA ROW Studio $905 Studio $1,775 500 square feet 425 square feet
  55. AVERAGE APT. ALPHARETTA, GA HAVEN AT AVALON 2B $1,162 2B $2,350 1,244 square feet 1,200 square feet
  56. As walkability increases in a community, so does property value. $$ $$ $$ $$ $$ $$$ $$ $$ $$$ $ $ $ $$ $$ $$ $$ $$ $$ $$ $$ $$ $$ $$ $$$ $$ $$ $$ $$ $$ $$$ $ $$ $ $ $ $$ $$ $ $ $$ $$ $ $$ $$ $$ $$ $$$ $ $ $$ $ $ $ $$ $$ $ $ $ $$ $$ $300 per month to apt. rents $$ $$ $ $ $ $$ $$ $ $ $$ $$ $$ $$$ $$ $$ $$ $ $$ $$ $$ $$ $$ $$ $$$ $ $ $ $$ $$ $82 per sq. ft. to home values $$$ $9 per sq. ft. to office rents $$ $$ $$$ $$ $$ $$ $$ $$ $ $ $ $$ $$ $$$ $$ $$ $$ $$ $$ $$ $$ $$ $$ $$$ $$ $ $ $ $$ $$ $$ $$ $$ $$ $$$ $$ $ $$ $$ $$$ $ $ $$ $$ $$ $$ $$ $ $ $ $$ $$ $$$ $$ $$ $$ $$ $$ $$ $$$ $$ $ $ $ $$ $$ $$ $$ $$$ $$ $$ $$ $$ $$ $ $ $ $$ $$ $$ $$ $$$ $$ $ $ $ $$ $$ $$ $$ $$$ $$ $$ $$ $$ $$ $ $ $ $$ $$ $$ $$ $$$ $$ $ $ $ $$ $$ $$ $$ $$ $$ $$$ $$ $ $ $ $$ $$ $ $$ $$ $ $ $7 per sq. ft. to retail rents $$ $$ $ $
  57. Size of new apartments in U.S. fell to lowest square footage since 2002 square feet 1,043
  58. People are downsizing their living space…
  59. … and opting for a sleeker, more modern option.
  60. Having to deal with inconveniences of everyday life.
  61. Luxury properties offer a concierge, exclusive services & benefits like valet.
  62. “Apartments are shrinking because when you live in a mixed-use community, what’s outside becomes an extension of your living space. This is why developments like Santana Row and Pike & Rose are achieving higher rents and higher occupancies.” MARK TORO MANAGING PARTNER NORTH AMERICAN PROPERTIES
  63. 2,025 prospects are on the interest list for one of the 250 luxury rentals at Haven at Avalon
  64. Here’s what they are lining up for…
  65. Gigabit Community Programmed Public Spaces Walkability Urban Feel Five-Star Concierge
  66. best restaurants IN YOUR BACKYARD
  67. best retailers IN YOUR LIVING ROOM
  68. People are already considering a new version of The American Dream.
  69. Haven at Avalon LIVE IT
  70. MOVE IN November 2014
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  74. IMAGE SOURCES Set Your Site in Greater Philadelphia by Jerome Rozen (image) Friends having fun outdoors by Svetlana Damjanac / iStock.com (image) Smartphone designed by George Agpoon / The Noun Project (icon) Footprint designed by Jule Steffen & Matthias Schmidt / The Noun Project (icon) City designed by Nicholas Menghini / The Noun Project (icon) Crowd of People Walking on the Street by Rafael Ramirez Lee / Shutterstock.com (image) Receiver by Sergey Krivoy / The Noun Project (icon) Coffee by Sam Ahmed / The Noun Project (icon) Car by Laura Beggs from The Noun Project (icon) Martini Glass by Stanislav Levin / The Noun Project (icon) Shopping Bag by Erin Standley from The Noun Project Dumbbell by Ola Möller from The Noun Project Mortar Board by Paul Souders from The Noun Project Anchor designed by Jeremy Elder / The Noun Project (icon) Airplane designed by misirlou / The Noun Project (icon) Pike and Rose Groundbreaking by Maryland GovPics / Flickr (image) Santana Row by Bruno Pinheiro / Flickr (image) The Grove in Los Angeles, from above, no. 12052203 by Eric E. Johnson / Flickr (image) The McMansion by Dean Terry / Flickr (image) Thumbs Up designed by Alv Jørgen Bovolden / The Noun Project (icon) US Open Parking Lot by alex92287 / Flickr (image) Caulking window by kimkole / iStock.com (image) Cookie Cutter Houses by Ann Walsh / Flickr (image) Santana Row by Eric Fredericks / Flickr (image) Reception Bell designed by Catia Marsh Mallow / The Noun Project (icon) Footprint designed by Jule Steffen & Matthias Schmidt / The Noun Project (icon) City designed by Nicholas Menghini / The Noun Project (icon) Wireless designed by Edward Boatman / The Noun Project (icon) The Americana at Brand by Chris Yarzab / Flickr (image)
  75. DATA SOURCES Axiometrics | axiometrics.com/company/pressreleases/apartment-occupancy- hits-95 Survey by Apartments.com | realestateeconomywatch.com/2014/01/nearly-half- of-all-renters-are-ex-homeowners/ Survey by Trulia | magazine.good.is/articles/most-americans-want-a-walkable- neighborhood-not-a-big-house National Multi Housing Council (NMHC) | finance.yahoo.com/news/ landmark-resident-survey-identifies-top-173400335.html National Association of Realtors | realtor.org/articles/how-millennials-move-the- car-less-trends U.S. Census Bureau | tampabay.com/news/business/realestate/pricey-posh-tiny- apartments-rule-tampa-bays-big-money-rental-boom/2189650 Urban Land Magazine | urbanland.uli.org/infrastructure-transit/housing-america- s-graying-population/ Harvard Joint Center for Housing Studies | harvard-cga.maps.arcgis.com/ apps/StorytellingTextLegend/index.html? appid=7e85ff667f804fe0aaf10a5a27db9c39 Hart Research | macfound.org/media/files/ How_Housing_Matters_2014_FINAL_REPORT.pdf Rent Comparison (San Jose, CA) | forrent.com/apartment-community-profile/ 1000059389.php Rent Comparison (Alpharetta, GA) | apartmentguide.com/apartments/ Georgia/Alpharetta/The-Lex/259/ Study by Brookings Institution | nytimes.com/2012/05/27/opinion/sunday/ now-coveted-a-walkable-convenient-place.html?_r=1& U.S. Census Bureau | census.gov/construction/chars/pdf/ mfu_medavgsqft.pdf U.S. Commerce Department | bloomberg.com/news/2014-07-10/renters-trading- size-for-frills-fuel-u-s-apartment-boom.html http://www.nytimes.com/2014/08/30/upshot/is-owning-overrated-the-rental-economy- rises.html?_r=0

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