Real Estate Market Shift Is Here
This year, 2018, we are
Millennial home buyers now make up the largest percentage of home buyers and have been out in force looking for a first home boosting the starter home market ($100K to $250K) in high demand.
Now factors that impact a Millennial’s homeownership probability? Being married. The chances of them going to buy a house increases by 14.9% once they’re married.
The chances of them buying a house increases by an additional 6.2% if they have children. As such, Millennial home buyers going ahead to buy a house will continue to rise nearly 25% if they also are married and have a child.
What do we know about the Millennials?
They’re starting to age. They’re not like Generation X, that married at 21 and had three children by the age of 30. On the contrary, they’re waiting longer, into their 30’s before they get married, and they’re getting into their mid-30’s before they have children.
Now that more Millennials are entering their 30’s, I think it’s safe to say there will be a strong demand in the starter home market. That demand will continue. [0:07:13]
Mark Fleming, the First American Chief Economist.
“Yet it is reasonable to expect homeownership rates to grow as Millennials continue to make important decisions, including attaining an education, and later in life, getting married and buying a home.”
The challenge is that the inventory of homes for sale in the first time home price range of $100-$250K has not kept up with demand, which has led to A LOT of competition for the move in ready homes that are available.
An article by the National Association of Realtors talks about the frustrations many home buyers are experiencing:
“Realtors® in areas with strong job markets report that consumer frustration is rising. Home shoppers are increasingly struggling to find an affordable property to buy, and the prevalence of multiple bids is pushing prices further out of their reach.”
Realtor.com went on to explain why we are seeing Millenial buyers flooding the market:
“A booming economy and stable employment in most parts of the country have created a new generation of eager home buyers – and led to fevered price battles spilling over into some unexpected, smaller markets.”
Javier Vivas, Director of Economic Research for Realtor.com had this to say:
“Multiple-offer scenarios are no longer reserved to the usual big, fast-moving markets…demand for homes has spilled outward into secondary, smaller markets, and more buyers are gearing up to face fierce competition in more places around the country.”
Millennial home buyers have to come onto the market fully prepared to compete. Not surprisingly, we are seeing purchase offer bids go as much as $15K to $25K over asking price in the first home $180K to $225K price range. Below are some examples:
Single Family Home, Clifford, Brighton – Lake Front – List Price $185K – Winning Bid $205K