With the largest segment of the house buying population expected to be millennials in 2017, it is helpful to know more about what’s important to them. Millennials is the term used to describe the generation that is currently 35 and under. According to Realtor.com, 33% of house buyers in 2017 will be Millennials. Even though this group has dominated the market for the last 3 years, there is a notable shift in store this year – more Millennials are planning to enter the market to buy their first home. So what does this mean for the market? Here are some things to keep in mind.
First off, due to the surge of first time buyers in the market, finding affordable starter homes could be an issue. The spring and summer are expected to be the hot seasons (literally) for people to be buying so that can lead to bidding wars and price increases. For buyers, you many want to consider buying in the off-season if you can wait. And for sellers, you may want to list your home when you have the best opportunity to get the most action.
Secondly, some Millennials who are in a better financial position are opting to skip the starter home and go right to the move-up house. According to The National Association of Realtors, for those who have paid down most of their student loan debt or who have saved a sizable down payment, this is a possibility. After all, for those who are getting married, starting a family, or just plain tired of renting a cramped space, why not? Millennials value safety, privacy and outdoor/entertaining space, which can be hard to get that in a condo or starter home, so it’s not uncommon to see this generation skip a step in the housing ladder. Realtor.com found that about 40% of Millennial buyers are looking at single-family homes and only 10% are interested in condos.
Finally, financial issues are a major concern for Millennials. Whether it is saving for a down payment or sticking to their house hunting budget, Millennials are cautious about finding a home that they hope will be a sound investment. I’m working with some buyers right now who are in their early 30s and have been living at home to save for a down payment. They are hyper aware of the real estate crash that we experienced about a decade ago and want to play it safe. They are constantly asking about how the prices have fluctuated in the communities they are looking in and curious to see rental rates are in line with their mortgage payments just in case they ever need to lease it out.
By Holly Schwartz
Holly Schwartz is a realtor with Villa Real Estate who lives in Eastside Costa Mesa and has been featured on “House Hunters.” She can be reached at HSchwartz@VillaRealEstate.com.
