How Single Adults Are Changing The Real Estate Market And Why

Share News:

Living single IS all it’s cracked up to be

In 1969, Three Dog Night sang, “One is the loneliest number.” Is it time to retool that to, “One is the happiest number”? 

I’ve written before that homebuilding in the US is short millions of homes as a result of the continuing underbuilding that began in 2008 (here, here, here). In Dallas, we’re tens of thousands of housing units behind which has caused housing prices to dramatically rise since 2012, hampering affordability.

Single Households Doubled Since 1960

At the same time, a longer-term trend towards single-person households continues to rise from roughly 7 million in 1960 to 37 million in 2019 according to Census data. While some of the growth is attributed to population growth, as a percentage, single households more than doubled from 13 percent to 28 percent during the same period.  

That’s a lot more housing units for a market that’s an afterthought to builders. And it’s different housing. Singletons might purchase a large home, but childless singletons don’t need unending bedroom counts. We don’t need formal and informal spaces. We don’t need separation. Personally, I now live in 2,500 square feet with just two bedrooms and oversized entertaining/living spaces. Condos have this type of product, single-family or townhomes, less so.

At the smaller end, singletons may stay in “starter” housing longer because their “start” may also be their “finish.” This upsets the conveyor belt of continually trading up as family grows before cashing out and downsizing in retirement.

The Market is Geared Toward Single-Family

In a quick Ebby.com search of the upper end, there was one single-family home priced over $1 million between 2,000 and 3,000 square feet with just two bedrooms – promoted as a teardown. Between $750,000 and $1 million there were two (here, here). The search tool also seems to bend away from singletons with only “minimum bedrooms” selectable but no maximum – as though more bedrooms is always better. Just like every home needs one bathtub, singletons looking for a detached (versus “single-family”) home are told that bedrooms are needed for resale – assuming a singleton’s homeownership to be a blip.

I know when I watch home improvement TV shows, rarely are the homebuyers single. Rarely are their slightly different needs even discussed.

Single homebuyers tailor their needs to the product available much more than coupled or multi-person households – because almost everything but the one-bedroom condo/apartment is built with more than one occupant in mind.

“Nonfamily = unmarried. “Other family” = singletons

Why Are Single Households Growing?

The age-old pressure to “grow up, get married, get kids, grow old” has weakened in recent decades. There are innumerable, books, blogs, podcasts, and social media feeds on how living alone is joyful – a stark contrast to the spinster cat lady ethos (although misogynistically being a “bachelor” never carried the same stigma).

Above we see the rise of “living in sin” and living single increasing as married households diminish. It’s funny to see this chart. Those opposed to same-sex marriage often said it would destroy traditional marriage. But heterosexual marriage has been on that slippery slope since 1947 – a 70-year build-up to that eventual outrage shows a lot of dedication.

Other reasons are attributable to increasing numbers of Baby Boomer widows and widowers. Marriage, remarriage, and divorce have also changed. Since records began in 1867, women have always filed for divorce more than men (62 percent then, 70 percent now). Lowering remarriage rates also play a part in single households. In 1990, of 1,000 divorcees, 50 got remarried, by 2013 it was 28 – a 44 percent drop. Among American adults today, we spend more time single than we do married. The state of marriage has a huge effect on housing.

Source US Census 2017

A third part comes from women increasingly becoming more comfortable living alone and realizing homeownership is often better than renting. And some have become more comfortable resisting convention to marry – remember, Mary Richards stayed single on eight seasons of Mary Tyler Moore.

Seen above, single homeowners suffered along with the broader market during the Recession. But the spread between male and female single homeowners continues to shrink. In 1986, there were 5.7 percentage points more single female-owned homes than male, but by 2016 (latest data), that had shrunk to 2.8 percent – essentially dropping the spread in half.  

However, more recent trends see that point spread widening again. In the past three years, the percentage of single female homebuyers grew compared to male. Single women accounted for 18 percent of home purchases in 2017 whereas men were only 7 percent. That home buying trend comes at both ends of the spectrum – better-educated, higher-earning younger women and downsizing single retirees (which circles back to divorce and widowhood).

For a variety of reasons, single households have been growing for decades – no longer a trend, but a movement. As buyers, sellers, Realtors, and builders, we must adapt.

For me, when buying a home, my most successful transactions were when I used equally single Realtors. They “got it” better than those who subliminally injected their own ideals into the search process. Yes, I still got the “you need a bathtub” talk, but never on needing more bedrooms, never about accommodating a future partner’s or children’s (or at this stage – gasp – grandchildren’s) needs.

Now if I could just get my doctor to stop telling me to “get out there” and asking me if I’m depressed.

mm

Jon Anderson

Jon Anderson is CandysDirt.com's condo/HOA and developer columnist, but also covers second home trends on SecondShelters.com. An award-winning columnist, Jon has earned silver and bronze awards for his columns from the National Association of Real Estate Editors in both 2016, 2017 and 2018. When he isn't in Hawaii, Jon enjoys life in the sky in Dallas.

Reader Interactions

Comments

  1. MaryBeth Harrison says

    Good information and a mirror of my real estate clients. I both sell to many single buyers as well as living that lifestyle myself. I talk to some who have leased for years and watched their rents raise yearly, not to mention pay the owner’s mortgage. Why not buy and know what your payment will be for the foreseeable future. Especially now while interest rates are hovering at all time lows. Even if they go up a full point (and they will eventually) you would be surprised at what you can buy versus what you are paying in rent. Add to that the tax benefits some can claim on their Federal Tax return and the cost becomes even more attractive.

    MaryBeth Harrison

  2. Jolene Monaco says

    Well that was a refreshing perspective. I bought my first home as a single 26 year old woman in the burbs because I was leaned that way by my married Realtor. I felt like a fish out of water.

Leave a Reply

Your email address will not be published. Required fields are marked *