Are student loans and avocado toast really stopping millennials from buying homes?
Jake Buzzard is, as these millennials say, “living his best life.”
The 32-year-old transplanted from central Illinois rose through the ranks to a high-paying job as a retail manager for a large multinational corporation in Grand Prairie. He oversees hundreds of workers, has a committed relationship, and, along with a growing number of his generation, owns a home: a $ 500,000 home in an upscale neighborhood in North Oak Cliff that he closed in April. .
Millennials buy houses. Never mind the punditry that straw-hating plastic snowflakes are stuck in overpriced apartments because they keep opening their wallets for $ 7 of avocado toast. They represented 34% of U.S. homebuyers in 2017, more than any other age group, according to to the National Association of Real Estate Agents.
And while a host of economic factors work against them, Millennials are pushing developers to make their communities rich in experiences and amenities, inclusive and connected to the cities around them.
Millennials are on the edge to become the largest generation in the country, and they are the plurality of the workforce, according to the Pew Research Center. And born as early as 1981, they’re also much older than many realize, with the oldest of the generation between 30 and 30 years old.
“At this age, they want the same things their parents did: a home in a safe neighborhood with good schools nearby,” said Randy Guttery, director of real estate programs at the University of Texas at Dallas.
About 70 percent of millennials expect to live in single-family homes by 2020, according to a study from the Urban Land Institute, a think tank on real estate and land use planning.
Buzzard’s house – his first because it took longer than expected to save money to buy – was a new build, rare for buyers of his generation. It was within his price range and close to his and his girlfriend’s work, which he said was indispensable for the new digs. And it’s in Kessler, a neighborhood close to the bars and culture of Bishop Arts and downtown.
Proximity to culturally rich areas is important to Millennial buyers, said Jolie Barrios, a 27-year-old real estate agent at Clay Stapp and Co. who worked with Buzzard to find a home. She said more than half of her transactions since 2017 have been with buyers in their late twenties or early thirties, based solely on her age, which she says makes younger customers more at home. comfortable, but also from the dawn of the owner millennium.
But even though these buyers want homes at the same rates as their parents, their interactions with the real estate world are not the same.
“They are quite particular,” said Barrios. “They want a good price, something green and something that’s been recently updated. You know, it’s instant gratification. We all work a lot, so we don’t have time to do a renovation. when we buy. “
They also want community, connectivity and inclusiveness, said Tony Ruggeri, the millennial co-CEO of Republic Property Group, a developer who builds large communities at Light Farms in Prosper and Walsh in Fort Worth.
“We don’t do golf courses anymore, we do food and drink,” Ruggeri said. “And the concept of walls and doors, the instinct to isolate yourself from the outside world, it’s completely reversed.”
Checking all of these boxes requires a lot of research, a natural reflex for people who grew up both on the internet and in the shadow of the housing crisis. This is the main difference between them and their parents, who generally bought at a younger age and relied more on real estate agents.
Millennials are wise to be careful.
While nearly all millennials want to own a home at some point, only a quarter do so now, far fewer than previous groups of young adults. They are struggling with unprecedented student loan debt, rapidly appreciating rent payments, and other debts, like auto loans and lines of credit, making it difficult to raise money for down payments. And in an increasingly expensive, undersupplied market like Dallas, it can be hard to beat more established buyers who have invested the cash to close the deal.
It should also be noted that a lot of young people are actually doing live in urban areas, more than previous iterations of their age cohort, and many are happy with the rental.
He also argues that 20 and 30 year olds have always gravitated to denser places before rolling out to the suburbs as they get older. The only thing truly unique about millennials demographically is their unprecedented diversity, which makes their exact needs and wants difficult to pin down.
“When you talk about a generation of around 70 million, there are tons of stereotypes – positive and negative,” said Jake Wagner, the other co-CEO of Republic Property Group. “I think everything is true to some extent or another.”