Tough Times Lead to More Generations at Home

(March 2) -- The soft economy gives new meaning to family reunions.

More buyers are purchasing homes to accommodate more than one family generation, and households are otherwise doubling up for all kinds of reasons.

In the past 12 months, 37 percent of Coldwell Banker real estate professionals surveyed said they've noted an increase in home buyers looking to move more than one generation into a home.

In the back-to-the-future scenario, the move is most often an economic decision.

The vast majority -- 70 percent -- of Coldwell's sales agents say continued soft economic conditions may cause even greater demand for multigenerational housing in 2010 and beyond.

Shared housing can mean shared expenses and, when the economy improves, shared equity -- a win-win economic situation.

During past boom markets, appreciation has generated an equity windfall large enough to allow shared-housing partners -- family or otherwise -- to part ways, both with enough cash for a down payment on their own homes.

"That could be the case here, too. It's obvious that home values are lower and there are expectations that they will rise and today's home buyers will be able to do the same thing," said Kim DiBenedetto, a real estate agent with Coldwell Banker Del Monte Realty in Carmel, Calif., and past president of the Monterey County Association of Realtors.

OK to Go Home Again

A U.S. Census report, "Current Population Survey (CPS) - America's Families and Living Arrangements: March 2009" says in 2009, in households where kids lived with either or both parents, nearly 2 million households included both grandparents; another 2.8 million included a grandmother; and another 655,000 included a grandfather, for a total of about 5.5 million multigenerational households.

Expect more of that in the 2010 census, which will include a multigenerational family at 1600 Pennsylvania Ave. in Washington. That's where America's "first grandmother," Marian Robinson, lives with her daughter, Michelle Obama; her granddaughters, Malia and Sasha; and her son-in-law, President Barack Obama.

"If you are pooling your resources, you can get something larger and nicer to house a parent or grandparent you want to take care of. And the grandparents can take care of younger children who need babysitters," DiBenedetto said.

Recession refugees -- 40-year-olds recovering from foreclosure, job loss or both; 30-year-olds saving for a down payment on a first home -- are moving back with family, often parents, to get their finances back in order.

But it's not just "baby boomerang" kids returning to the nest and creating bigger households. Older Americans lost a good deal of their nest eggs -- funds intended to pay for everyday expenses, assisted living or retirement -- in the decline of the housing and stock markets.

Cultural Roots

Financial considerations are the No. 1 reason people are moving in with more than one generation, according to 39 percent of Coldwell Banker's agents surveyed. Twenty-nine percent said health care is the primary factor, while 6 percent cited a strong family bond as the main reason.

"While saving money is certainly an incentive for buying a home that accommodates multiple generations, the benefits go beyond just financial reasons," said Diann Patton, Coldwell Banker's real estate consumer specialist.

U.S. Census Bureau demographer Tavia Simmons says it's also a cultural thing.

Multigenerational families are more likely to reside in areas of recent immigration, where new immigrants may live with their relatives.

"With two or three generations living under one roof, families often experience more flexible schedules, quality time with one another and can better juggle child care and elder care," Patton said.

The rise in rates of divorce and single parenting also factor in.

"My mom was a single mother," DiBenedetto said. "My sisters and I lived downstairs and my grandparents lived upstairs. It's good for children because they have grandparents around, as well as the savings on property taxes, utilities and other shared expenses."

Progressive planning and zoning laws also foster multigenerational living. Liberal zoning in some areas make multigenerational housing easy by permitting "granny quarters" or "mother-in-law suites" on the property, but physically separate from the main home.

Some homes come with, or can be retrofitted to accommodate, self-sustaining apartments or units with their own bathroom and kitchen, attached to or within the main home.

"Whether it's a garage apartment or refurbished basement, this separate space can help one home stand apart from the others," said Patton.