Millennials, Gen Zers Have Changed The Real Estate Landscape: How The Industry Must Respond

According to the Urban Institute, in 2015 37% of millennials were homeowners, an 8% decrease from Gen Xers' and baby boomers' homeownership rate at the same age (25–34). Millennials And Gen Xers While demographic and lifestyle choices, as well as a desire for nonconformity, have contributed to the high rates of renting over owning among millennials, one of the main factors pricing millennials out of homebuying is, ironically, high rents. While baby boomers and Gen Xers saw homeownership as an opportunity to build wealth and as a place to settle down, millennials do not. Millennials are often unable to forgo renting in favor of homeownership, in part because of the high cost of living in the cities they choose to live, as well as the high debt load they carry following graduation. It is a double-edged sword in a manner of speaking: Low single-family housing supply is contributing to lower homeownership rates among millennials because developers did not see millennials demanding single-family homes. Changes Are Coming (Again) Although so much time and effort have been spent on understanding the millennial generation and their homebuying preferences, the market is on the cusp of yet another shift in homebuying trends as Generation Z (commonly defined as those born after 1995) prepares to enter the market and make their own mark. While millennials have suggested that developers and owners become more environmentally and ethically conscientious, it is Gen Z that is expected to enforce the ESG investment practices. It is important for property owners within the workforce housing space to familiarize themselves with their residents. Rather than assuming that what worked for one community will work for another, widen your outreach program to include roundtable discussions or focus groups that garner direct feedback from your residents. For now, millennials remain in the driver's seat, as they are currently the largest market and the right age to buy and rent homes.

5 Tips When Buying a Newly Constructed Home

When you buy a newly constructed home instead of an existing home, there are many extra steps that must take place. These inspections are important because the inspector will often notice something that the builder missed. If you are an out-of-state buyer, will you receive weekly pictures of the progress via email? Look for builder’s incentives The good thing about buying a new home is that you can add the countertop you need, the mudroom you want, or an extra porch off the back of your home! Schedule extra time into the process There are many things that can impact the progress on your home. Rain can delay the pouring of a foundation as well as other necessary steps at the beginning of construction, while snow can freeze pipes and slow your timeline. Most builders already have a one-to-two-week buffer added into their timelines, but if you are also in the process of selling your current home, you must keep that in mind! Visit the site often As we mentioned earlier, be sure to schedule time with your project manager at least once a week to see the progress on your home. If you are ready to put your current home up for sale and find out what new construction is available in your area, call a local real estate agent who can help you with the sale of your current home and the search for your new one. Members: Sign in now to set up your Personalized Posts & start sharing today!

Real Estate vs. Stocks: Which Has Performed Better Over 145 Years?

What’s a better investment, stocks or real estate? If each asset requires $20,000 in cash to purchase it, then it takes a lot of money to build a broad, diverse portfolio. But residential real estate? For everyone who didn’t like the look of how real estate returns have compared to stock returns over the past few decades, consider that the Sharpe ratio for real estate has only grown stronger over time. Another way of looking at it is return per unit of risk – here’s how equities have compared to real estate in each of the 16 countries studied: Returns & GDP Advanced economies tend to have slow economic growth, right? On average, equities and real estate perform several times better than GDP growth. But Wealth Wise Wendy, who’s not nearly so average as Joe, invests as much money as she can in equities and real estate. Want a few reasons why rental properties are better investments than bonds? Should I Stop Investing in Equities and Just Buy Rental Properties? Residential rental properties offer excellent returns with low volatility.

How to Raise Money for Your Next Deal—Without Legal Issues

And in another two days, we’ll see another good friend, Brandon Turner. To Preface This Discussion In the world of real estate investing, we have two main hurdles to clear: finding deals and finding money to finance those deals. How to Raise Money This is where I tell you that I am not a licensed professional and cannot offer specific legal advice. Well, asking for money is solicitation. What is general solicitation? General solicitation is you asking for money from people with whom you do not have a standing relationship. Now, since you don’t really know the person you are speaking to, this relationship should most likely be considered general. Related: 7 Life-Changing Lessons I Wish I Knew as a Real Estate Newbie Remember, what gets you in trouble is the “General + Solicitation.” You can have general conversations without soliciting, and you can solicit from pre-existing relationships. But, next time you are about to ask, or about to make that post on a social network, just remember—what gets you in trouble is general + solicitation. Any questions about general solicitation?

7 Painful Lessons I Learned While Tearing Down and Rebuilding My House

When my husband and I bought our first home 11 years ago, we knew it needed some work. We loved our neighborhood, and we wanted to stay. Figure out exactly what you want before you start At the outset, we'd met with our building contractor about a bathroom remodel and possible extension—because that's all we thought we needed. That way, we could have done just one building plan rather than two. Make as many decisions as you can early in the process, and that will give you a better idea of how much the project will cost. However, the neighbors a few doors down, whom we didn’t even know, would let their daughter, who was maybe 6 or 7, play on our construction site. In our build, the quote for doorknobs included the wrong count, and the window quote listed windows with the wrong grid pattern. My advice: Start contacting them early in the process, verify what they tell you, and follow up a lot. Work with your partner, as best you can The stress of building a house can’t be emphasized enough. But that meant having to relay information back and forth and then having to delay actual decisions until I could talk to him.

American Homeownership Increases Again as Housing Market Looks for Balance

More Americans became homeowners in the summer months, fresh evidence of a housing market that’s finding some stability after several rocky years. That’s a half-percentage point higher than a year ago. At the same time, many Americans who would ordinarily become buyers were locked out of the market by stringent lending rules, a lack of affordable inventory and a challenging economic backdrop. All that has made the post-crisis housing market not just less accessible, but less dynamic. It’s possible the moderation in home prices over the course of 2018, which some analysts believe came from would-be buyers pushing back against hefty price gains, helped many of them finally become owners. The homeownership rate can be controversial. Some analysts believe that government policies that helped enable ownership more broadly were responsible for the housing crisis, although many others believe there’s blame to go around. Still, the meager recovery to this point puts the homeownership rate only back to 1995 levels, well before the run-up to the bubble. That suggests it may be possible for many more Americans to become owners, if housing market conditions ease further. The vacancy rate for owners was just 1.5% for the second month in a row, tighter than the 1.6% it averaged throughout 2017.

Student Loan Debt Impacts Millennial Buyers

Student loan debt is impacting some first-time Millennial homebuyers. According to the MagnifyMoney team, “Millennials with student loan debt tend to have larger mortgages on lower-value homes. About 34% of millennial graduates with student loans are homeowners, while 36% of those without student loans are homeowners.” Where the equation changes are the price of homes bought by Millennials with student loan debt. “The difference is those with student loan debt are buying homes priced about 5% less than those without. As housing prices have risen dramatically around the country, Millennials making that first home purchase are seeing the long-reaching impact of student debt. Beau Hodson founder and senior mortgage loan originator of San Diego-based Transparent Mortgage works with first-time Millennial buyers. “As we think about student loans on the back end, we focus on students responsibly borrowing on the front end.” Covel’s national association represents college and university financial aid administrators. “Every year a student takes out a new loan, they have to know what the total accumulated debt will be. The Federal government gives students six months after graduation before they have to begin repayment,” she adds. “With 42% of home buyers being first-time buyers and 71% of those under 37, student loan debt is a major factor in the housing market.” As interest rates are hovering at 5% and predicted to go higher it’s no doubt qualifying will become tougher.

Home Prices Still Increasing Despite Fall In New Homes Sales

New One Family Home Sales The number of new homes sold began to fall a year or two before six out of the last seven recessions. (Home sales did not fall before the 2001 recession.) If more luxury homes sell because the stock market is hot, that would increase the median and average home prices in a city even if home prices haven’t actually changed at all. The latest Case-Shiller numbers show that home prices were still increasing in all 20 cities covered by the index and in the U.S. as a whole, but price increases were getting smaller. Hot: Las Vegas home prices (up 13.9% in August compared to the previous August), San Francisco (up 10.6%) and Seattle (9.6%) had the highest annual home price appreciation in the 20 cities covered by Case-Shiller. Cold: New York (up 2.8%) tied Washington D.C. (up 2.8%) for the least home price appreciation in the 20 cities. Home Price Momentum Las Vegas and San Francisco had by far the largest increases in home price momentum comparing their price increases the last 12 month to the previous 12 months. Seattle's price momentum slowed the most, down 3.6%, but Seattle still had a very high 9.6% appreciation rate over the last 12 months. U.S. home prices increased 5.8% in the last 12 months and 5.9% the previous 12 months. Half the 20 cities covered by Case-Shiller saw increasing price momentum and half saw decreasing home price momentum.

How to Get a Mortgage Without Financially Freaking Out

"People put a tremendous amount of stress on themselves to not mess up," says Nick Holeman, a certified financial planner at Betterment, an independent online financial adviser. It means you're going to have to work harder to understand the info that you need when it comes time to buy a home. (Higher than that and you may not comfortably buy a house and keep your shirt.) Learn from other home buyers "Friends or family members who’ve purchased a property likely felt the same anxiety you’re feeling,” points out Chris Taylor, a broker and investment property specialist with Advantage Real Estate in Boston. Understand the basics of a mortgage Before you make open houses a hobby, study up on the basics of applying for a mortgage, making a payment, and some of the costs associated with being a homeowner. Talk to a mortgage lender Before you ever set foot in a house, you should meet with a mortgage lender. For one, he can tell you exactly how much money you'd be pre-approved for, so you can shop for houses you know you can afford. After you have your financial affairs in order, “you'll be able to enjoy the process of purchasing a new home without fear and anxiety,” says Stroud. Same goes with finding a trustworthy real estate agent who can help you find a home that suits your needs. “As long as you're comfortable with that, the [home-buying process] will be easier to visualize,” assures Rodriguez.

Are You Spending TOO Much on Rent?

Chances are if you are renting you are spending too much of your income on your monthly housing expense. There is a long-standing ‘rule’ that a household should not pay more than 28% of their income on their rent or mortgage payment. This percentage allows the household to save money for the future while comfortably covering other expenses. According to new data released from, 49.5 million renters in the United States were cost-burdened in 2017, meaning they spent more than 30% of their monthly incomes on rent. When a household is cost-burdened by their monthly housing expense, they are not as easily able to save money for the future. The percentage of income needed in the US to buy a home is significantly less than renting at 17.1%! As you can see, the cost of renting has climbed above historic numbers while the cost of buying dropped over the same period of time. Bottom Line If you are one of the many renters who is spending too much of their monthly income on rent, consider saving money by getting a roommate, moving into a less expensive apartment, or even moving in with family. These are all ways to save for a down payment so that you can put your housing costs to work for you! Members: Sign in now to set up your Personalized Posts & start sharing today!


3 Things I Love & Despise About Being a Landlord

Hey there! To help you with your real estate investing journey, feel free to download BiggerPockets’ complimentary Tenant Screening Guide and get the information you need to find great tenants. 3 Bad Things About Being a Landlord While rental property is a smart investment, there are some downsides to being your own property manager. This is largely because of all the calls you have to handle and make and any repairs or issues you have to fix or coordinate yourself. 3 Good Things About Being a Landlord You don’t really save much money by managing your own rental properties, but there are reasons you might want to try it. More Control You get direct control of all the money, how you shuffle it, who you rent to, and how you handle repairs and contractors. You Can Do Better When we don’t like the way we see other people doing things, it is easy to believe we can do better, even if we don’t understand how things are the way they are. Just budget in enough for a professional third party manager when you do your numbers so you can hire out if you don’t like it or aren’t getting the results you want. Related: The Biggest Landlording Mistake I Ever Made Summary Investing in rental properties is great. It may not be the job for you if what you want is more money, time freedom, and passive income.

Are Home Prices Peaking?