Millennials are making their presence felt in the real estate marketReturn to Blog
Over the last several years, millennials have rented to stay nimble and keep work opportunities open. Now, they're ready to buy.
Why does it matter? About 4.8 million millennials turn 30 in 2021, and many expect to enter the home-buying market if they haven't already. This wave of new buyers will have the opportunity to build, pass on wealth, and shape the market for years to come.
We're still feeling the impacts of the financial crisis of 2008, where many people bought homes they couldn't afford, allowing developers to corner the market on foreclosures. However, that event now serves as a lesson for Millennial homebuyers. Allowing first-time millennial buyers to head into the market with the knowledge their first home may not be their dream home.
Millennials are growing wiser as they enter a new stage of life, being more open to multi-family options like condos and quadruplexes, so they can start building wealth despite today's low inventory of single-family homes.
While First-time buyers are ready to build equity, have more space, and take advantage of relatively low mortgage rates. Seasoned millennials turn 40 this year and are focusing on listings that provide ample space for their growing families. Overall, homebuyers are entering a competitive market, with low inventory and home prices surging across the board (except condos and some townhomes).
While low mortgage rates give buyers more power, that same power is meaningless when there are far too few homes on the market to take advantage of the low rates — A recent study by Realtor.com backs this up. 43% of first-time millennial homebuyers have been looking for more than a year. 44% say they still need more money for a down payment and other closing costs. While 34% state they can't find a home in their budget.
Millennials are leaving larger cities like New York and heading west or south. Migration patterns, according to SmartAsset, show five of the 10-most popular states among millennials have no income tax:
The bottom line is that the average millennial buyer wants a house with a nice backyard in a desirable, quiet location. A garage, updated kitchens and bathrooms, good schools, and attractions nearby are also common-wishlist items. The difference between now and 2008 is that millennials have the money and want to spend it! Millennials who can afford bonus luxuries are involved in anything from sales to multiple side hustles. So if you're a seasoned homeowner looking to refinance, 1031-exchange, or move up from your starter home, you'll more than likely face bidding wars with a few millennial buyers who are more prepared than you think.
If you're searching for a competitive edge in your home buying, selling, or management journey, contact Darryl Glass today at (510) 500-7531. For your convenience, you may also schedule a call with Darryl at a future date here.