At the ULI discussion last night, I was asked about opportunities I see for young entrepreneurs wanting to get into real estate.
I gave a fairly macro answer about the middle class returning to big cities and how that is going to continue to drive increases in rents and property values in urban centers.
But I really have another idea that I’d like to kind of noodle on today.
Here it is, in bullet points:
- No young people can afford houses in the areas they want to live without major help from family
- They are unwilling to move to the suburbs like their parents did
- So, they are going to remain renters for longer (forever?)
- But, people still like the idea of owning something
So, the question is, if you’re a renter devoting a large portion of your income to rent in a cool urban neighborhood and therefore unable to save a down-payment, what can you own?
I think some people are going to make a lot of money figuring out how to create ownership opportunities for this demographic, whether in the form of inexpensive condos, innovative financing (maybe with the developer holding notes with low downpayments), and innovative second- or vacation-home products.
Maybe some of you slightly younger folks can take it from here?