Building Wealth Through Real Estate in this Strange Housing Market
You might not know this crazy statistic but 90% of all millionaires either make their money or hold their money in real estate. That is partly because someone always needs …
Mary Beth Sammons (Subscribe to Mary Beth Sammons’s posts) Sep 8th 2010 3:15PM Categories: The Empty Nest, Research Reveals Teens, Expert Advice Teens, Home Base Email This
You just unloaded the SUV, assembled the futon complete with zebra-print sheets and kissed your youngest goodbye as you dropped her off at college, but already your mind is racing with visions of all the ways her now unoccupied bedroom at home could be transformed. An exercise room, a home office, maybe a guest room? Don’t reach for the Pottery Barn catalog and vino to celebrate your newfound “home alone” lifestyle just yet. There’s a good chance your 20- or 30-something “older” child could be returning to the nest. Multi-generational households – demographic jargon for “Guess what, Mom? I’m coming home … For good”– are on the rise. Suddenly, Junior’s not just mooching your food and lugging his laundry home on weekends, but you’re the real-life Kathy Bates folding your 24-year-old’s workout clothes and making his bed, ala the plot of “Failure to Launch.”Only, there’s nothing romantic about this real-life comedic twist. And, bummer, Matthew McConaughey is missing from this picture. According to a Pew Research Center study released last spring, Americans are reverting to mixed-generational living. And, confirming the Pew findings, more studies have noted that rising unemployment and recessionary economic forces are spiking the trend of more extended families living under one roof. Today, more than 49 million Americans — more than one in six people — live in households with three or more generations, according to Pew. The percentage is even higher for age groups including 25- to 34-year olds, and those 65 and older, where one in five, or 20 percent, live in extended families. The study also finds that from 2007 to 2008, the number of Americans living in a multi-generational family household grew by 2.6 million. The pace at which multi-generation households are growing is quickening, as well. Pew data shows that between 2000 and 2009, the number of those households jumped 33 percent. And it’s hitting from both ends. Not only are more young adults backing their pickups and unloading their apartments on their parents’ driveways, but Grandma is pulling in right behind them. With the family home bursting at the seams, families are shopping for larger multi-generational abodes. Real-estate firm Coldwell Banker surveyed 2,300 of its agents, and 37 percent said they noticed more families were seeking houses that could accommodate multiple generations. There’s even a guidebook now available with tips for “living together again.” The recession and high unemployment rates are fueling this trend, Paul Taylor, Pew Research Center executive vice president and co-author of the study, tells Advertising Age. He says the trend has been accelerating rapidly, fueled by demographic and cultural shifts, such as the rising number of immigrants and the rising age of young adult marriages. In addition, undergraduates are carrying record-high credit card balances — the average balance grew to $3,173, the highest in the years, according to a Sallie Mae study. This is causing young adults to seek financial refuge at home, says Sharon Lechter, founder and CEO of Pay Your Family First, a financial education organization. “The boomerang effect may not only reduce their expense, but also their self esteem,” Lechter tells ParentDish. “My son, Phillip, found himself mired in $2,500 credit card debt his freshman year in college. When his father and I refused to bail him out he quickly learned that his part-time income did not cover his expenses. He returned home for his sophomore year until he could get his debt managed and realign his budget. He was able to move out again to complete his college education.”As with the case of Lechter’s son, most young adults are eager to strike out on their own again. “Usually moving home is temporary and transitional,” Jeffrey Arnett, professor of psychology at Clark University and author of “Emerging Adulthood: The Winding Road from the Late Teens through the Twenties” (Arnett Hardcover, 2004), tells ParentDish. “Despite the ‘failure to launch’ stereotype, few young adults want to live at home because life is easy there and the rent is cheap. Most would rather live on their own so they can run their own lives without their parents looking over their shoulders, even if it means living at a lower level of comfort.” All this begs the question, “So who’s the boss?” After she graduated from college, Andrea Melendez of Miami, now in her late 20s, moved back into her parent’s home for four years while she worked as a teacher. “There was no way I was going to be able to pay rent on my own,” Melendez, who now is married and out of her parent’s home, tells ParentDish. “It was tough on us because I had been away in college with no one to tell me when to do laundry, wash the dishes or be home on time.” She says she had to “sit my parents down and have a talk with them.” When they saw it her way, she says, “It worked out.” So, your adult child has decided to move home. There are things parents can do to keep the peace. Arnett offers these tips for parents to help keep their sanity when the nest fills up again:
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