Young adults today are buying homes five years later on average than they did back in 2006, meaning they have had a lot more time to get accustomed to living in apartments than prior generations.
That in turn is changing how architects and builders are approaching the kind of homes they are putting on the market for first-time buyers.
About six years ago, John Guilliams, a partner at KGA Studio Architects in Louisville, said his firm started studying when millennials might finally buy homes in larger numbers and what would appeal to them.
“If they are moving from an apartment, how can we approach designing a home to make them comfortable, to give them something they are familiar with and that is their own,” he said.
His firm pulled elements from multi-family designs and studied ways to put them into duplexes and townhomes, while keeping costs down. They turned hallways into stairs and stacked floors to put more space onto a smaller footprint. Floor plans were kept open, which eliminated costs, but also mimicked apartment designs.
Yards were out, but outdoor spaces, even if small, mattered to Colorado buyers. Small decks off the main level were essential, and for those who could afford it, rooftop decks.
“It goes back to the lifestyle they are used to having, where someone took care of their apartment building. They don’t want to take care of a yard,” Guilliams said.
Financial considerations are also at play. Heavy student loan debts plague that generation, and many older millennials struggled to launch their careers because of the last recession. Home prices have also risen sharply since 2012 in metro Denver, making even starter homes a much heavier burden than in the past.
“They aren’t looking for a large house, they are looking for something compact,” he said.
Multi-family developers have focused heavily on luxury apartments in urban areas with high-end finishes and a lot of amenities. Replicating the luxury apartment look in a more modest for-purchase home isn’t that easy.
“They are used to living with a certain level of experience when it comes to the amenity packages and finishes,” said Angela Harris, CEO and principal of Trio in Denver. “They can’t afford some of the stuff they are used to living with.”
Designers in the new style offer options for a few high-end finishes, but don’t overdo it, Harris said. Simplicity is key, along with allowing buyers to personalize their homes. Going with a neutral or basic color scheme allows colors to be added through the items brought into the home.
“Buyers aren’t forced to make too many choices or to make expensive choices,” she said.
Other design elements consistent with the “apartment effect” include smaller kitchens with smaller appliances, no oversized closets and more hidden storage, showers instead of tubs and single rather than double sinks in the master bathroom.
Young adults do want to own a home, but they also want affordability, functionality and a walkable location, things that apartments provided them, said Kenneth Perlman, a principal at John Burns Real Estate Consulting.
Surveys show that young adults are more drawn to open floor plans that can adapt to fit their lifestyles and to contemporary designs.
“They want clean, simple elements without a lot of fuss,” he said. “The buyers that are coming out of apartments, a lot of which are new, want the same design.”
The “apartment effect” offers a way to provide those buyers a design they are comfortable with and payments that are comparable to the rent they paid, said Mike Davidson, vice president of sales and marketing at Wonderland Homes in Denver.
“We have to do everything possible to increase density on large pieces of land to keep the prices down, at least until the market softens,” he said.
Wonderland builds its units on a post tension slab or above a crawl space. A garage, one- or two-car, occupies the ground floor, with a kitchen and living room above it, and the bedrooms above that floor. In some locations, a rooftop deck for entertaining is an option.
“By stacking the spaces you maximize them and create a more attainable product,” Davidson said. “It keeps the payment close to what a comparable rent might be.”
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Wonderland is offering the product in Superior, Wheat Ridge and at Stapleton. Buyers are typically younger singles and couples starting out.
Dan Bergeron and Danielle DenBleyker purchased one of Wonderland’s 47th Avenue Row Homes in Stapleton after looking at a lot of different places and more traditional floor plans.
The home they purchased came with about 1,800 square feet and a price tag of $413,000, which represented a better bargain than housing alternatives available downtown, Bergeron said.
“We wanted to be in something more than an apartment, but we weren’t ready for four bedrooms, a yard and a basement,” said DenBleyker. What Wonderland offered fit the bill.
