Austin Business Journal – by Francisco Vara-Otra ABJ Staff
Link to Online Article

As Generation Y enters the housing market in bigger numbers each year, master-planned communities that have thrived off the suburban lifestyle must rethink their formula to remain attractive, a joint report by two Austin real estate companies concluded.

In place of larger, new cookie-cutter homes away from the city’s hustle and bustle, Generation Y homebuyers — age 30 and under — would rather see master-planned communities offer proximity to work, green space for outdoor activities and walkability to grocery shops, cafes and libraries, the report stated.

Austin firm RVi Planning + Landscape Architecture + Graphic Design and the Austin office of Washington, D.C.-based real estate investment advisory firm Robert Charles Lesser & Co. suggest that planners of master-planned communities should open their eyes to what will become the largest homebuyer segment in the city within the next eight years.

The study of about 3,500 Generation Y potential homebuyers, conducted by Robert Charles Lesser & Co. and shared exclusively with the Austin Business Journal, showed 66 percent of them want to live in a walkable community — likely a reaction to growing up with long commutes from the suburbs and high gas prices. Study respondents also think they don’t have to move away from the central part of the city to raise their children, the report stated.

“This is a very important shift in homebuying trends for the Austin market because we are such a young city,” said Todd LaRue, principal for Robert Charles Lesser & Co. in Austin. “The old model of master-planned communities being in a more secluded place, more dependent on the car will not work as well with this generation.”

Not only have Generation Y’s 80 million people, born from 1979 to 1996, overtaken the 75 million baby boomers in terms of demographic size, but also many boomers are selling their homes to move to retirement communities or apartments, or to live with relatives. In Austin, Generation Y is already the largest demographic, with 418,000 people, resulting in 40,000 new local homebuyers annually.

While the term New Urbanism — which refers to walkable, mixed-use neighborhoods often centered around public transit — has been bandied about Austin’s development scene for the past decade, some believe Central Texas hasn’t truly caught onto the trend.

Generation Y “is a huge untapped market,” RVi Vice President Chris Crawford said. “Aside from components of the adaptive reuse of the Mueller airport space, I don’t think we’ve seen a master-planned community project yet truly planned to cater to the demographic.”

While some younger homebuyers are still more comfortable living in the suburbs, some brokers have already seen the shift that the report suggests.

“Younger people are more willing to deal with the pros and cons of living in a more urban setting,” said Bryan Kosarek, a 28-year-old broker and owner of Austin Rising Real Estate, a firm devoted to selling homes to those classified as Generation Y. “And they want where they live to suit their pursuit of a healthy balance in their quality of life.”