It’s all about the Millennials.
This month we discussed some deep dive statistics and trends that are informing our understanding of the market.
The national home ownership rate is holding steady at about 64% which is only 1% above the figure it bottomed out at over the last decade. Even with easing credit conditions, a stable low interest rate environment, improving economy and booming stock market sales prices are largely flat, sales pace is comparable to last year and inventory is still stubbornly down.
Why? A big reason is it’s all about the Millennials. Last year they surpassed the Baby Boomers as the largest living generation in the US. So what are they up to?
They are getting married later in life, having kids later in life, and thus buying homes later in life. And here is the kicker. What they are buying is not what people are selling.
They are choosing lifestyle over square footage. The day’s of the McMansion are fading. They will gladly trade a big house and it’s attendant mortgage for something more modest that affords them money for other areas of their lives or gives them a superior location. Anecdotally I am seeing most of my buyer clients make similar value judgments. This goes a long way towards explaining why the higher price points and luxury markets are hurting and expected to continue to do so.
Finances play a role in their decision making as well. Larger homes in urban areas often carry a sticker price that locks Millennials out of that market and they are OK with that. While they are OK with smaller homes in order to get the location and lifestyle they desire they are looking for homes that are close to turn key ready. They often don’t have the large chunk of capital to take on large renovation projects and, just like seemingly everyone else, have drunk the HGTV Kool Aid and would like their home to look that way too. Why not if you can make it work!
All of this is informative for sellers in how they go about preparing their home for sale. I would argue that trends like these make it more critical than usual to make sure your home is properly updated/repaired, staged, marketed and priced. The need for an elite agent with superior market knowledge is clearly more acute than ever.
If you are considering selling your home in the next year or so now is the time to start preparing. Give me a call and we’ll see what needs to be done (and doesn’t need to be done) to maximize the eventual sale of your home.
It’s a good life.