In fact, those born in the 1980s differ significantly from those born in the 1990s. Rather than “Millennials,” the older group might be better characterized as Sharers, the younger as Connectors.
John Burns, CEO of an eponymous real estate consulting company in Irvine, Calif., explained during a panel at the recent Urban Land Institute Fall Meeting in Los Angeles how Sharers’ and Connectors’ different economic experiences and demographics impact their desire to become homeowners.
“Sharers invented the sharing economy,” Burns said. “They use technology to do cool stuff to disrupt the society. Airbnb, Uber, Facebook — these companies were started by this group.”
Now 28 to 37 years old, Sharers may be motivated to disrupt their world because they haven’t had the economic opportunities older generations enjoyed. Instead, Sharers were hit hard by the Great Recession and hot-air balloon of student debt, which quintupled from $260 billion in 2004 to $1.23 trillion in 2015.
“We told them, ‘Go to school, get a degree and you will be fine,’” Burns said. “They did — and then they graduated into the Great Recession. They have a college degree, they have a ton of debt and they got stuck working in retail for six years. Not their fault.”
Sharers prefer urban living, but are moving out of cities to suburbs as they start families. They’re getting creative and finding ways to buy a home, despite their student debt. One option Burns mentioned is buying with roommates ready to move in and using that rental income to quality for a mortgage.
“Younger Millennials are (called) Connectors because they’re connected all day,” Burns said. “They’re connected to their helicopter parents. They’re connected to all their friends. They’ve shifted society to being all about the smartphone.”
Now 18 to 27 years old, Connectors are in their prime years for what demographers and economists call “household formation,” which might mean singles getting together to rent a home or a young couple buying a home.
These new households are important consumers of all sorts of products — everything from furniture, kitchen appliances and holiday decorations to pet supplies, subscriptions, entertainment and take-out meals. Connectors are driving today’s economy with their purchases.
Connectors were only 4 to 13 years old in 2003, the year when so many Recession-strapped families first took an inexpensive “staycation” instead of the traditional family trip away from home.
“Connectors want to be homeowners,” Burns said, “but they know the pain of debt and the pain their older siblings have gone through. The younger group will go to college and accumulate student debt, but they’ll be more cautious and wary because of it.”