Multigenerational Home Living On the Rise – Cincinnati Homes with Mother In Law Suites

VIDEO TRANSCRIPT

Moving In With Your Family? Why You Should Consider a Multigenerational Home

There are a couple of articles that just came out this week that I found really interesting that’s showing that American buyers are looking at multigenerational homes and buying those homes at a higher rate than they have in the recent decade. I want to show you some of the information on that and then I want to also talk through, if you’re considering a multigenerational home, basically moving in with your family. There are a number of reasons why you might want to do that. What are some of the top considerations you should think about? So stick around for the end of the video when we get into a local custom home builder here in Cincinnati, Ohio who has thought through this from a design standpoint and also just from a livability standpoint.

So, let’s look over at this Business Insider article that just popped out. The headline is “House hunters are snapping up multigenerational home and it’s reshaping how the typical American family looks.” So what’s going on here? Look at the highlights of this article. Fifteen percent of you as home buyers bought the multigenerational home last year. The highest in nine years. The uptick was driven by cost savings, aging parents moving in with their adult children.

So after the great recession, we saw a lot of these boomerangs where kids who couldn’t get jobs were moving back with their parents. Well now, we’re starting to see the reverse where aging parents are moving back in with their adult children. There’s also the coronavirus. The recession from the coronavirus is causing a repeat on the rise in co-living in the great recession.

American households are becoming one big family. From April to June in 2020, 15% of home buyers bought a multigenerational home. A new report by the National Association of Realtors said that was the highest multigenerational home buying rates since the NAR began tracking the metric nine years ago in 2012, following the great recession when many families combined households.

So I want to pop over to this article and you can see this chart go all the way back to July 2012 when they started tracking this and you can see it was higher than as people were dealing with the economic difficulties of the great recession, families were moving back in together to kind of save money. And then as the economy was getting better, you see this basically slow dip down where it’s like, okay, we’re doing a little better. We’ve got a job on our own. We can go out and buy our own house. And it fell all the way to only 11% back up to March of 2020, then COVID hits, and boom, it shoots up from 11% to 15% of multigenerational home buying.

And you start to get into the reasons why this is happening. So this chart here is looking at purchase… The light blue is before March 2020 and the darker blues after April 2020. So looking at some of these reasons why it’s happening, well, they want a multigenerational home. Some are taking care of aging parents and relatives, and certainly, the boomers are an aging generation. So we’ll probably see more and more of that because if you look into it, and I actually did this for a few years, was looking to starting a business for assisted living or any type of senior care living home. It’s super expensive, super, super expensive to do that. And so, as the boomers are aging, you’re going to see more and more boomers moving back in where kids are taking care of their parents. Let’s see what else is a big jump here.

Another jump is to spend more time with your aging parents, kind of along those same paths. Cost savings is a big one. Children or relatives of over 18, never left home. So that jumped up. Wanted a larger home that multiple incomes could afford together. A lot of it’s coming around this cost idea. Let’s go back to this article here.

So in 2012, 14% of home buyers bought multigenerational homes dipping to 11% a few years later. The percentages are record high of 15% as a consequence of the pandemic. Driven by coronavirus concerns, loneliness, and childcare needs, more aging parents are moving in with their children. How many of you out there can relate to that? How many of you, your life was upended with the coronavirus. The kids might be at home. They can’t go to school right now. You’re super lonely because you can’t go out the door.

So what a lot of people did was essentially go to their family and their close network and say, “Hey, we’re not going to go see other people, but right now let’s make a circle around us and mom and dad, grandma and grandpa, maybe you can help with the kids while I’m trying to do this zoom video for work.”

I know that impacted our house and I’ve got five kids at home. So to be able to have grandma and grandpa help is a huge boost as to why we’re seeing this multigenerational home happening. Also, income loss. And so when, if you lose… A lot of people lost their jobs, obviously through the pandemic. And so when you’re down an income stream, when you’re down one job that’s coming into the family, well, if you can move in together with each other, it’s going to make a lot of sense in terms of the affordability of your housing. If you can pull that off and live in the same home together.

The Effect of Recession and Covid Pandemic on Families Buying Multigenerational Home

Playing a smaller role is adult children boomeranging back home. So we talked about this a little bit before. A Pew Research Center analysis of census data indicated that more than half, 52% of young adults age 18 to 29 were living at home. They’re not a bigger driving force of the trend because they likely moved into houses that already had enough space for them. Meaning, their family didn’t need to buy a bigger home. So what we’re seeing now is kind of a repeat of the great recession. The increase in multigenerational home buying is likely to cause the average American household size to climb.

In 2018, this is really fascinating, the average U.S. Household size began rising for the first time in over 160 years. So from 1790 to 2010, it declined to 2.58 people. So it was at 5.79 in the household and it went all the way down to 2.58. But in 2018, it rose for the first time since 1850 to 2.63. So just a slight rise. Pew noted that there wasn’t info before then. The trend was most prominent among adults age 35 and older. Richard Fry wrote the decline was correlated with a decrease in the number of children women were having, as well as fewer extended family living arrangements. So the big reason is people are having fewer kids. Women are having less kids. Women are joining the workforce and having less kids. And as the wealth in the nation increased, people are like, “I can go buy my own house.” And so you’d have less extended family living arrangements. The uptake, Fry said, was likely due to several factors, including multigenerational households. From 1980 to 2016, the number of Americans living in multigenerational households increased to 20% from 12%.

The great recession also left more Americans residing in shared quarters, whether with roommates or with parents, Fry wrote. The share of these households increased to 20% in 2019 from 17% in 2007. It seems that the coronavirus recession is repeating the co-living effect of the great recession. But this time, the National Association of Realtors said the shift in multigenerational living might be permanent. Interesting. That’s because it’s growing out of the combination of the work-from-home economy and the K- shaped recovery in which pooling resources helps financially burdened Americans. Having an extra caretaker around for kids in remote schools doesn’t hurt either.

Okay. So what is that saying? In 2012, or 2008 to 2012, following the great recession, a lot of it was economically based. This time around, the economics is certainly part of it, but what it’s saying is, look, there’s a lot of changes happening that might be long-term with COVID if COVID is going to stick around.

Businesses found out during COVID, hey, I might not need all this office space. I might actually get more efficient workers if they’re at home, not having to commute, being able to be in their own space and at home. Maybe I don’t need this big office space. Maybe I should just keep my workers working at home. Well, if that’s the case, then something needs to change. Right?

As I’ve been working with other home builders here in the Cincinnati area, and be sure to check out our new construction videos that we’ve done on Westchester, Mason, Independence, different areas around town, one of the top requested feature of new homes is the home office. Why? Because everyone’s working from home right now, or a lot of people are working from home. And so that’s a big reason why this shift in multigenerational living might be permanent.

Considerations When Buying a Multigenerational Home

So let’s take a look here, what are these houses you might want to look at if you’re thinking about multigenerational living? What are some of the features you might want to consider? I want to hop over to the Cincinnati MLS and I did a search. And traditionally the phrase that’s been used from a realtor standpoint is a mother-in-law suite. Right? You maybe have heard that before, besides the multigenerational, it’s a mother-in-law. Means, okay, mom can move in and she can live in this part of the house. And so I just did a search in the Cincinnati MLS of “mother”. I put mother in the marketing remarks. There are only three houses active right now that have that phrase. And there are about 40 that have sold in the last six months. So it makes sense that people are looking for this.

Some of the things you need to watch out for is a lot of times you’ll see in the marketing remarks, there’s an extra bedroom and the seller might say, “Hey, there’s potential for a mother-in-law suite because we got an extra bedroom.” Right? And yes, that’s true. But as you’re thinking through working from home, as you’re thinking through caring for parents, let’s talk about some of the most optimal designs for a mother-in-law suite or multigenerational home if you’re thinking about this going forward.

This one, for example, that I’ve got pulled up here, it sold for 405,000. It was on the market for a little bit because you can tell it’s kind of dated in the carpets and things like that. But, this one says it’s a full finished basement with a complete mother and daughter suite. So if you look into… See if I click on this right here, you can tell this is the basement going downstairs and it’s got a full, separate kitchen. As opposed to… Let me see if I can click into another one here that says… This is exactly what I’m talking about, right here. The fourth bedroom would make a great mother-in-law suite.

This one, for example, that I’ve got pulled up here, it sold for 405,000. It was on the market for a little bit because you can tell it’s kind of dated in the carpets and things like that. But, this one says it’s a full finished basement with a complete mother and daughter suite. So if you look into… See if I click on this right here, you can tell this is the basement going downstairs and it’s got a full, separate kitchen. As opposed to… Let me see if I can click into another one here that says… This is exactly what I’m talking about, right here. The fourth bedroom would make a great mother-in-law suite.

Well, is it really a mother-in-law suite for a fourth bedroom? I mean, it’s a bedroom, but it isn’t really a suite. And the reason I’m bringing that up is a lot of you who have boomers as parents. I have a boomer, I have two sets of boomer parents, both my in-laws and my parents. And one of the things that boomers, I’ve noticed the trend, is they like to have their things the way they have their things. And so, while they love to be around the grandkids, they also want their own space. Right? And so just having a fourth bedroom or potentially a fifth bedroom or something like that, it’s not necessarily their own space.

I want to shoot you guys over to this article from this local Cincinnati home builder, Hensley. I came across this, this morning as well, researching. I thought they did a good job as they’re thinking through the new kind of home that somebody might want. It’s not just an extra bedroom. You can do that. And if money is tight, certainly it’s still a good reason why to move in with other people. But if you can afford it, you might want to be thinking about a home that’s designed functionally that if you’re going to live multigenerationally with family, you’re also not going to kill each other. Right? While it can help you economically, it can really hurt you relationally. If you’ve been living apart for 5, 10, 15, 20, 25 years, 30 years, and you’re set in your ways and you kind of cram that all back in together, that can cause some really tense family dynamics. Right? So, I thought that these guys, Hensley, they put out a few things that were really interesting here.

A place for mom. Called a mother-in-law suite or a granny flat, a separate living space in your home can be perfect for aging parents or any other long-term resident.

Paul Studer has created a lot of options for Hensley Custom Building Group. Clients looking to accommodate extended family members either for a short visit or a longer stay. “We created one apartment behind an attached garage,” Studer says. “Their mom was active and mobile. She could live on her own as much as she wanted or spend time with the family.” “A suite for aging parents is usually on the first floor of our custom homes,” said Tim Hensley. “That way mom or dad is close to the main living area, but has their own space and doesn’t have to go up and downstairs.”

So what amenities should be included in a self-contained suite? “A bedroom, bathroom, and a big closet,” Hensley says, “and you could add a seating area and a small kitchen.” “Kitchenettes in a multigenerational home can be very simple,” Studer says. “A small fridge, microwave, sink and coffee maker will cover most needs.

If there’s no kitchen or kitchenette included, it’s a good idea to place a suite close to the home’s kitchen.” So this is a huge point, I think. If you have a little kitchenette, you can always go back into the main house for the larger kitchen for bigger cooking needs. But if you can do most of your meals in your own kitchenette, that’s a huge advantage or a separate kitchen because the kitchen is where you spend… It’s the room that gets the most traffic in a home.

And so, when you’re living multigenerationally, and let’s say you have different tastes or you’re on different schedules and you’re eating at different times and you’re trying to cook a meal, but grandma is cooking on the stove right now. That’s where a lot of these problems arise. Or, you don’t have time to do the dishes this week and so grandpa super frustrated cause he likes to clean the house and you haven’t done the dishes because you’ve got three kids and like you’re running to all of these activities and everything else. So, having a separate kitchen space is, I think, very, very important in this idea.

The other idea that came up here was having an apartment essentially that’s built on the lot. And so it’s close by, you’re saving money because you don’t need a full big space. You can share the living space. You can share the dining room. You can share the living room. You can share storage in a garage. But, build a building on this small… Either apartment, either addition, or something close by where it works perfectly from a multigenerational standpoint.

And the other thing I would say to this, I’ve actually seen this happen up close and personal because my neighbors have built onto their house. Multiple additions. One was a large… We live in Fort Thomas, Kentucky and the living rooms are designed kind of smaller. So they built one addition that had a nice, big living room that they could use and to host larger gatherings. And on top of that, they added a mother-in-law suite. They added a little apartment up there, a new kitchenette for the mother-in-law. And it was awesome. And then the other set of parents said they wanted to move in. And so what they did was they built, in addition to that, a garage and on top of the garage, there’s another apartment. And they have an elevator shaft, that’s not needed right now, but in time as the parents age, they can put in the elevator and the grandparents can live in the space above the property. Separate living spaces, separate kitchens, but when you want to get all the family together, they can come into the main home.

I think it’s a great idea. I think builders who are thinking like this are thinking really smart because you can kind of combine incomes. A lot of people are going to be moving towards this way and you’re probably moving towards this way. One other bonus option. I know guys have been talking about this and this is a longer video. So I apologize for that. But it’s exciting to me because I care a lot about family and the idea of taking care of your parents or combining incomes and just living more efficiently. it’s really important to me. And it’s something honestly that I’ve done with my wife for most of our marriage. We haven’t lived with family necessarily, but we have had other roommates live in. We’ve bought larger homes where we can share with other roommates and live in that way. And so we thought about this a lot.

Multigenerational Home Can Also Be an Income Generating Investment

But the other bonus… And I’ll sign off on this video guys. I know this is a long one. Thanks for sticking in there. If you haven’t liked it already, please give a like or leave a comment below. I’m curious about your thoughts on this topic. But one other thing to consider, if you do that, that apartment that’s kind of separate from the house is, if you live in a place where you can do a short-term rental, this to me, this is the great transition. Because you can have your house, you can potentially put the apartment up on Airbnb that can either pay for the addition or can pay for even your mortgage potentially.

Let’s say, mom and dad aren’t ready to move in yet. They’re still in their 50’s or 60’s or 70’s and they’re still moving along well. And they don’t want to move into your house yet. Well, this is a great way to be thinking about, if you want to take care of your parents in the future, you build that addition, you get some extra rental income and it’s an easy transition for them to see themself there in the future. So that way it kind of smooths over the awkward situation of, “Hey mom, dad, you’re getting really old and busted and I don’t want you to fall and break your hip, please come live at our house.”

And so I think that’s a really good idea to build. If you were to build an addition as an apartment that you can use it for short-term rentals, like Airbnb, make some money. In fact, I sold… I have these clients up in Loveland, Ohio who did that and on their garage, there was a one-bedroom apartment. They made it into an Airbnb and they’re just crushing it. Like it’s doing so well for them. They’ve got their house right there. And they were thinking like this. They were thinking, okay, well mom and dad may move in, they might not, but either way we can make money off of this. And I think that’s an awesome idea, a great way. So builders like this Hensley if they’re thinking about this, and thinking about sharing and not sharing how to do this design, and how to think through home offices, and how to think through grandparents and grandchildren and multigenerational home living, I think this is an awesome idea.

It’s Your Turn To Take Care Of Your Parents!

If you’re thinking about getting a multigenerational home, good on you because I love the idea of the home drawing the family together. We’ve got so much abundance in this nation that has kind of gone the other direction over the years and where we split our families apart. And that just makes me sad. And so I like this idea of trying to bring families back together and kind of that full circle of life where your parents took care of you when you were a child and as they’re getting older in their years, you’re saying, “Hey, I want to take care of you and I’m going to use my resources now. You took care of me. You used your resources and your time and energy and money. And now I’m making more income, mom and dad. I want to take care of you. I want to invite you into this place.” And it can work economically and it can work in a lot of ways. And so, as you can tell, I’m fired up about this, but this chart just made me happy to see this. And if COVID has done a lot of things, but if one of the things it’s doing is driving families back together, then for that piece of it, I am happy.

Contact Us! Team Sztanyo: We Help Families Find Their Way Home

All right guys, this was a long video. Thanks for hanging in there. For those of you who were watching it. If you’re thinking like this and want to try to shop in the Cincinnati area for a multigenerational home or try to get creative around that, give us a call at Teamsztanyo. We would love to help you out. I think some of my clients who have thought like this and who have bigger families have been some of my favorite. Not that I have favorites, but I kind of do. Favorite clients to work with who are thinking like, thinking ahead in the future, thinking both towards their parents and towards their kids in the future. And I just love that. And so I’d love to help you out. If you’re not in Cincinnati or Northern Kentucky, and you are thinking like this still, we could give you a referral to another great agent in another city. So, that’s it for now guys. Thanks so much for watching. Watch some other videos and we’ll see you next time.