Cultural and financial concerns have long been common reasons for families to opt for multi-generational housing. However, now more and more people are considering this option as a way to keep aging parents out of senior living facilities due to pandemic concerns. The National Association of Realtors®’ 2020 Profile of Home Buyer and Sellers found that buyers have been more likely to purchase a multi-generational home since the start of the pandemic – 15% versus 11% prior to 2020.
Impact on real estate
The recent trend towards multi-generational housing has resulted in a higher demand for larger homes. Even better, single-family homes with separate living quarters such as a detached apartment or guest home are in even higher demand right now. In a recent survey, home buyers cited multiple reasons, such as the health and caretaking of aging parents and relatives, cost savings, the desire to spend more time with aging parents and relatives, and the need for the delayed independence of children as reasons for buying multi-generational homes. They also said buying a multi-generational home allowed them to pool multiple incomes to purchase a larger home.
We are even seeing home builders respond to these most recent trends. For example, many new homes being built today have two primary owner suites. As a matter of fact, we have seen a 20% increase in the construction of multi-generational homes. At the same time, we have also noticed a 2.5% decrease in occupancy of assisted-living facilities and independent living centers.
As with any disruptions in the market, there have been new business models created. For example, companies that specialize in building accessory dwelling units have increased in popularity. For homeowners that have the land, these companies will build a cottage-type dwelling unit in the backyard. Many of these companies claim that the cost to build these units combined with the cost of in-home nursing care is still less expensive than assisted-living facilities. In addition, this may also be a safer option during the pandemic.
Although the prospect of several vaccines in the coming months is looking promising, many wonder if this experience will forever change mindsets for homeowners. After all, having additional space at home may not be such a bad idea after all…