Arizona has long been seen as a haven for retirees. Millennials are now the nation’s largest home buying demographic. GenXers buy the most expensive homes. Hispanics are America and Arizona’s fastest growing population segment.
But which of these groups influences the Phoenix market the most? It may not be who you think.
Recent research from NAR indicates that Millennials are the largest percentage of buyers nationwide, comprising 34% of the market in 2016 (actually down a percent from 2015). Of this age group:
As Millennials move into the “kids and family” stage of life (sometimes, without the kids) their housing choices are becoming more traditional. They are increasingly interested in suburban areas that have space for dogs or kids. But, while Millennials are making headlines nationwide, they’re not the most influential demographic in Phoenix Valley, according to most surveys.
What about Boomers? Boomers are a huge demographic, but one that is split across two very different age groups – half of whom are retirement age, and half of whom are not. Each of these groups comprises about 14% to 16% of all buyers, and they have different characteristics, which makes them harder to treat as a single group.
Younger boomers ages 52 – 61 are more likely to be members of the “sandwich generation” with children over 18 as well as parents living in the home. Their reasons for buying are typically job relocation or moving to be near family, with some downsizing.
Older Boomers, on the other hand, are more likely to move for retirement, to downsize or be near family. Recent research by SmartAsset shows that Phoenix is the 2nd most-popular retirement destination for retirees after Florida, thanks to warm weather and retiree-friendly tax policies.
Retirees definitely do influence our market: the Phoenix area is home to four of the top retirement destinations nationwide. SmartAsset named Mesa as the most popular city in the country to move to for retirement, leading all cities nationwide with a net gain of 2,565 seniors. Mesa is followed by Phoenix and Chandler at 4th and 5th, Peoria and Gilbert at 7th and 8th, and Scottsdale and Tucson at 12th and 13th.
All of this data would indicate that Boomers are the most influential demographic here in the Phoenix Valley. But no, it isn’t them either.
Is it Generation X? Now you’re getting closer. Although Gen Xers are the smallest of the three generations that NAR and SmartAsset tracks, they comprise about 28% of buyers nationwide. This generation is in the middle of their peak earning years, and are most likely to have children under 18 living at home. They have the highest incomes and buy the largest and most expensive houses, according to NAR’s research. Their primary reasons for moving are job relocation and need more space, and their top requirements in a home are a convenience to work and quality of local schools.
Gen X buyers overall are pretty traditional, but the NAR research does indicate that there is one significant difference between them and other buyer demographics. They are the most diverse demographic by a wide margin, with 21% of Gen X buyers self-identifying as other than Caucasian.
According to market research firm Datos, Hispanics represent about 30% of the population in Arizona, a number that has tripled since 1990, and is expected to double again over the next generation. In Arizona, Hispanic home-buying has nearly doubled along with the population of Hispanic residents over the last 15 years. That’s why market research firm Datos projects that Hispanic homeownership in Arizona is likely to be the most influential demographic trend over the next five years.
Demographically, Hispanic buyers are more likely to be Millennials or GenXers; Datos also reports that these generations are more likely to be bilingual and bicultural. They are more likely to be married with children as well, putting them into the prime phase of life for home buying.
As homebuyers, they tend to be upwardly mobile, with home buying preferences that reflect their age and stage of life. Hispanic millennials share similar preferences to their age cohort in that they are seeking less expensive homes, while more financially established Hispanic GenXers and Boomers’ home buying preferences echo those of others in their financial situation – they may be upsizing to larger or more luxurious homes.
I’m curious: How does this data about age and ethnic diversity in Phoenix home buyers reflect what you’re seeing in your business? Shoot me an email to share your thoughts.BACK TO LIST