Millennials And The Housing Market

Millennials And The Housing Market

It’s no surprise that the rate of first time home buyers has been steadily declining for some time now. There’s a variety of factors contributing to the lack of under-35 buyers we’re seeing out in the market. Student debt, a change in family dynamics, and pure preference are all playing vital roles in the market we’re seeing today. For one, student debt is out of control. According to The Wall Street Journal blog, the average student debt in 2015 was $35,000, which makes it quite challenging to save for a mortgage. Although unemployment is down, most millennials aren’t making enough to support both their rent and student loans, let alone save for a home. Another change we’re seeing in the market goes back to family dynamics. The millennial age isn’t as quick to settle down with a family as society once was. More often than not, they’re opting to put off marriage and children until their mid and late thirties. Thus, they’re more likely to continue to rent until later on in life. Unlike earlier years, millennials aren’t so quick to choose a suburban life for their families either. More and more people prefer to raise their children in urban settings, as opposed to, what was once, “the suburban dream”. What might further attribute to the lack of millennials on the market, is the inventory of entry level homes available. Today, developers aren’t catering their plans to the millennial, as they’re likely aware of the current trends with that generation. According to the National Association of Home Builders, about 20% of new construction is attributed to entry level properties,...
Affordable Living, Where Are People Relocating?

Affordable Living, Where Are People Relocating?

With the rising cost of living in the country’s major cities of the Northeast, people are looking to start the lives elsewhere. When most people move away from a city, justifiable due to the overwhelming costs, they’re looking for more or less similar amenities with perhaps a touch less overcrowding. People are no longer just retiring to the south in their elder years, they’re fleeing the Northeast in search of a more affordable cost of living. So, where exactly are these people going you ask? The most favorable contender is Oregon. United Van Lines recently released their annual United National Movers Study where for the third consecutive year, Oregon was the No. 1 “Top Moving Destination”. United Van Lines has been doing this same study for 39 years and in the past 6 years, Oregon’s migration rate increased by 6%. In this year’s study, Oregon had 69% of moves to be inbound, while New York was 65% outbound. It’s really no surprise that people are migrating from the northeast and moving toward the southwest. The Economist posted an article back in March that stated the cost of living in New York rose 23% between 2009 and 2014. New Jersey, Massachusetts, and Connecticut all joined New York at the top of the outbound moves list. In the article, Michael Stoll, an economist, professor and chair of the Department of Public Policy at the University of California, Los Angeles, states, “This year’s data reflects longer-term trends of people moving to the Pacific West, where cities such as Portland and Seattle are seeing the combination of a boom in the technology and...
The New Strategy Behind Flipping Houses

The New Strategy Behind Flipping Houses

In a recent article by Brian Kline, Kline discusses the new strategy that investors have when looking for a house to flip. The market today is very much a sellers market, much in part to the increased popularity in flipping houses. So where inventories on investment worthy houses are low, investors have a new strategy around finding these properties. There are many people who own rental properties, yet live a significant distance away from these properties. Often times people inherit these properties from loved ones who have passed or they had previously thought it might be a good investment. Maintaining a property that is of great distance from the owner can be an agonizing burden, thus the appeal of selling. Investors are now direct mailing people in these types of situations. By utilizing property tax lists and other resources from the internet, investors are reaching out to these small landlords with an offer. This tactic has the potential to be very lucrative. Maybe these homeowners have often thought about selling the rental property they’ve acquired but didn’t have the time to go through the process. When you’re selling your property, while you don’t have to be there every step along the way, you do have to be present for some of it. Which proves to be difficult to those who don’t live close to the property. An investor reaching out to someone in a situation like this could be a saving grace for someone. Moreover, you would likely be able to get a rather low price for the home, especially if the landlord is eager to get it off...
What’s A Proper Gift For Your Client?

What’s A Proper Gift For Your Client?

During the holidays many us have a million and one gift we have to get and often times it’s difficult to think of the right gift. In fact, it can be more difficult shopping for a family member, someone you know the best, than a client you’ve known for a mere month. Aside from closing gifts, some real estate agents send a holiday gift or card to their clients of the past year. So what are the lengths that these agents are going to please their clients?  Closing gifts in real estate have become somewhat of a norm in the industry. When your buyer or seller closes on a property it is often custom to buy them a congratulatory gift. Most agents will leave a bottle of wine or perhaps champagne in their client’s new fridge, or present them with a basket full of goodies. In a Wall Street Journal article, Alina Dizik unveils a new level of closing and holiday gifts in real estate. Real estate agent Christophe Choo, presented his clients, who had just purchased a $15 million home in Los Angeles, with an all-expense paid trip to Las Vegas once the sale was closed. In a comment made to the WSJ, Choo said he gives such lavish gifts to the clients who spend over $10 million. SInce his “business is 70% repeat clients”, Choo finds it important to creating lasting memories for all his clients. Choo isn’t the only agent going to great lengths to to congratulate clients, and thank them for the commission they’ve just earned. After a buyer purchased a $1.2 million condo in...
An All Time Low For First-Time Home Buyers

An All Time Low For First-Time Home Buyers

2015 marks an all-time low percentage of first-time home buyers. According to cnbc.com first-time home buyers made up only 32% of sales, the lowest in over three decades. So what’s causing such a substantial decrease in buyers? In what many would argue, a favorable market, why is the homeownership rate in the US the lowest it’s been in 50 years at 63.4%?  The general consensus as to why there is a lack in first-time home buyers is millennial debt, much of this debt acquired by the younger generation comes from student loans. While there’s an increase in the desire for a higher education, it is also more commonly a requirement in the workplace. Now, in the application process, most companies don’t just “prefer” a bachelor’s degree but require one. In turn, the millennial age is continuing on to higher levels of education but also higher levels of debt in order to find a stable career. Student debt is preventing people from being able to save for a down payment. Instead of setting aside a couple hundred dollars a month, in hopes of owning a home some day, they’re paying hundreds a month on paying back their loans. Furthermore, what’s holding back the millennial age from purchasing a home is the significant increase in rent. The Wall Street reported that most people are paying rents that are 40% of their gross monthly income, leaving little to be saved. An ideal percentage of a monthly income dedicated to housing would be 25% to a maximum of 30%. This increase in rents nationwide is a classic cause and effect case. While employment...