A Transitioning Market
2019 has seen some shifts. Here’s the thing: like it or hate it, the present American presidential administration is providing exceptional market growth. A 3.1% growth rate in the first quarter of the fiscal year is practically unheard of, and records have been continuously broken for the last two and a half years.
What this has lead to is a real-estate boom. But the present administration is only part of the equation here when it comes to housing. The other part of the equation is a maturing “millennial” generation. Starting about 1982, the Millennial generation was born. Those born on the first of January in ‘82 turned 18 on the first of January 2001.
Those born December 31st, 1999 turned 18 on the same day in 2018. This spread has a high age of 37 and a low-age of 19. All those ages are right in the range where people start thinking about buying a permanent house.
With that in mind, the following writing will discuss trends that are defining the real estate market today among millennials. Certain areas are better than others—more secure, or less secure, accordingly. However, when it comes to loans and financing, there are some interesting realities worth considering.
Social media is changing the game right now when it comes to real estate. Have you heard of the crowdsource economy? Essentially, decentralized business and selling opportunities proliferate today, and real estate isn’t immune. Listings go up on Facebook, Craigslist, and other sites. Shared housing, subletting, and outright selling can all be done simply online.
Millennials have by-and-large grown up with the internet today, and prefer to have everything they want in one place. Real estate agents in 2019 are wise to have a social media presence, and continuously maintain that presence as it’s feasible to.
A Shift In Equity Ideation
There are some top-tier rental trends worth considering, like this apartment. However, even the best rental won’t build equity. As millennials approach the twilight of their thirties, they have begun to realize that community living, or living in an apartment, is essentially throwing money away. No equity is ever built, and the money disappears with each passing month.
There has been a surge in home purchases, and that is likely going to expand as millennials continue to mature and become the economically motivating factor across the world. This means that those who sell homes must augment their approach accordingly.
Rising Interest Rates
If you’re looking at a thirty-year fixed-rate mortgage, expect about 4.94% interest. In 2019, that rate is likely going to expand. Going the 30-year route, on a $250k property, you’d be looking at $1,399 a month. That means at the end of 30 years, you’ve spent $503,640, or more than twice the actual price of the home.
By 2049, you’ve paid for your house twice, and unless you were extremely savvy in its purchase, its value has a high likelihood of dropping substantially. Now this calculation excludes the down payment, but you get the idea: interest is exceptionally costly.
A better way to go about this is to buy a small property, pay it off as quickly as possible using rental options, sell it, and turn that sale into a larger down payment on a bigger property. Do this right, churn through a handful of properties, and by your late thirties or fifties (depending on your present age), you could buy a house outright.
More Bidding Wars Than Ever
Because millennials are becoming the driving economic force in the market, bidding wars are becoming more cutthroat. Most people can’t buy a house outright, and so need to come to the table prepared if they want a specific property. Pay down payments in cash. If you had non-negotiable agreements, negotiate to outperform other bidders.
Getting The Home You Want At A Price You Can Afford
Because interest rates are expanding, and millennials are becoming a core driving force in the market, the current real estate atmosphere is charged with potential. You can find the home you want, but you’ll have to do your homework—no pun intended!
Know what you can afford, what is going on in terms of present interest rates, how to bid, and how social media may impact your decisions. In 2019, these things are going to be key in helping you find the residential property best fitting your needs as a maturing millennial.
Ashley is an award-winning writer who discovered her passion in providing creative solutions for building brands online. Since her first high school award in Creative Writing, she continues to deliver awesome content through various niches.