WITH THE WAY THE HOUSING MARKET has surged, many parents have realized that in the time that it takes to earn a degree, their children could be on their way to financial success through home-ownership. Using the Federal Housing Administration's “kiddie condo” loan program, many parents put as little as 3 percent down to co-sign a mortgage for their college-enrolled children, all the while reaping tax benefits. Students, on the other hand, gain experience and equity.
And the trend is gaining momentum—especially in the nation's hottest markets, where price appreciation is at record levels. The National Association of Realtors began tracking the college market for the first time last year, estimating that 169,000 homes were purchased for post-secondary students in 2004.
Centex Homes, for example, has seen so much parental foot traffic through the sales center for its urban community Element in San Diego that it's re-evaluating some marketing strategies. While young, hip professionals still make up a majority of the community's sales, kiddie condo shoppers are gaining some market share. James Bonggat, a sales representative for Element, estimates that roughly 20 percent of the units already sold were to parents.
“The traffic that comes in … it seems almost like one out of four or one out of five people I talk to are looking to buy [a condo] for their kids,” he adds.
Correctly harnessed, this phenomenon could drive sales, says Porter Novelli's Cara Sbardellati, the senior account executive who spearheads Element's marketing for Centex. She's currently eyeing ad space in the quarterly magazines that universities send home to parents. Sbardellati also says she's exploring the idea of having Centex sponsor freshmen orientation packs for future projects in the area.