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.

Deedcoin launches private virtual token sale

Deedcoin, a digital currency startup that wants to disrupt real estate commissions by paying agents partly in digital currency tokens, last night began a private pre-sale of its tokens priced between $1.50 to $3.00. The company says these tokens, based on the Ethereum cryptocurrency standard–a popular alternative to Bitcoin with some extra features–can be used by prospective property buyers and sellers to hire real estate agents across the country. Deedcoin says in a document on its website that the private sale will “conclude on either June 30, 2018 or when 40 million tokens have been sold, whichever comes first.” The company claims that it has partnered with registered real estate agents in 28 states who have agreed to accept Deedcoin tokens as part of their payment, in addition to drastically reduced commissions paid in U.S. dollars—as low as 1 percent, according to the company’s launch website. Inman has asked Deedcoin for names of specific participated agents and will update when we receive a response. According to Deedcoin, buyers and sellers will be able to log into its website and list or find properties for sale where agents would accept Deedcoin. Participants in the private sale were instructed to visit the portal site, agree to the terms, enter the amount of Deedcoin they want to order, and click “pay now” to pay with a credit card or digital currencies ether, bitcoin or litecoin. Buyers could expect their purchased Deedcoin to arrive in one business day to their Ether Wallet address, the message said. The company plans to hold an Initial Coin Offering (ICO) on January 25, when it will open its tokens for sale to all members of the public. Deedcoin specifically says it’s complaint with U.S. securities law, noting in its email announcing the private sale: In compliance with SEC regulation, U.S. Deedcoin purchasers are limited to 1,500 Deedcoin ($2,250) plus bonuses, UNLESS you are an accredited investor. Deedcoin is just one of a growing number of real-estate themed ICOs planned for the month and year ahead.

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.
Affordable Housing

Evansville Promise Zone Partnership Announcement

If you are available please join us on Monday, February 11th at 1:30 pm CST to announce our new affordable housing partnership. The Promise Zone has formed a partnership with TruVest...

The 2 Rules Every New Real Estate Investor Must Follow

You may ask yourself from time to time, how many lists can we possibly have? I should make a list of lists the world needs. Well, maybe another day. Today I want to give you a very short list. Do not talk to a bank. Do not look at the MLS. Before you do any of that, these are two not-optional, mandatory, must-understand, can’t-be-avoided rules that every new real estate investor must understand: Not-Optional Rule 1 Your significant other must support what you want to do. Not-Optional Rule 2 Remember that other people don’t live like you. Some people are slobs. Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks, and techniques delivered straight to your inbox twice weekly!

Is the Real Estate Market Actually Predictable?

Whether you’re looking to buy your first rental property or you’re a seasoned real estate investor looking to add yet another property to your growing portfolio, you’ll want to reassure yourself that you’re buying at the right time. It’s a common belief that the real estate market fluctuates in cycles, with prices rising and falling at predictable intervals—but is that really the case? And if so, is it really possible to time the market? Annual cycles are somewhat predictable and based around home sales for each season. Related: The 4 Phases of the Real Estate Cycle (& What All Investors Should Know About Them) These multi-year cycles, if predictable, would almost certainly vary by location. That said, housing prices (and economics in general) aren’t the purely rational systems we’d like them to be. Key Variables to Consider There are many events and changes that could influence how the housing market changes, even within a historically consistent cycle: Broader economic conditions. For example, if a new park is introduced the neighborhood, or if a school receives top marks unexpectedly, it could significantly increase the value of all the properties in the area—regardless of where in the cycle those prices would otherwise be. Related: 5 Reasons I’m Not Worried About the New Real Estate Market Correction Making the Call You can use historical property prices in a given area to get a better understanding of both the annual and multi-year property value cycles in that area. Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks, and techniques delivered straight to your inbox twice weekly!

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!

What the Heck is Mortgage “Note” Investing? The Start of a Journey

Have you ever heard of people talking about note investing? Probably not! It is not a topic that you are discussing over coffee or at a social event.  Would you be...

Will Home Prices Continue to Increase?

There are many unsubstantiated theories about what is happening with home prices. From those who are worried that prices are falling (data shows this is untrue), to those who are concerned that prices are again approaching boom peaks because of “irrational exuberance” (this is also untrue as prices are not at peak levels when they are adjusted for inflation), there seems to be no shortage of opinion. However, the increase in prices is easily explained by the theory of supply & demand. Whenever there is a limited supply of an item that is in high demand, prices increase. It is that simple. In real estate, it takes a six-month supply of existing salable inventory to maintain pricing stability. According to the Existing Home Sales Report from the National Association of Realtors (NAR), the monthly inventory of homes for sale has been below six months for the last five years (see chart below). Nothing nefarious is taking place. It is simply the theory of supply & demand working as it should. Members: Sign in now to set up your Personalized Posts & start sharing today!

Ms. Independent: Top 10 Cities Where Millennials Live Alone

She rides her bike downtown regularly for dinner and a show, or sometimes to take a cool dip in the river. A top-of-the-millennial-pile 34 years old, she is among the 15 percent of millennials who live alone in Richmond, the metro area where a greater share of millennials live solo than anywhere else in the country. In a place where millennials living solo make a healthy $49,500 a year (median) and employment is up 3.6 percent since a year ago, that makes for an attractive package. She pays $960 a month for her 1-bedroom, which is in a new apartment complex and has that sweet balcony. It’s also a great place to settle down, and many of her friends are snapping up real estate. “I have so much more of a chance to buy a place here than I would in big, popular cities,” she said. Often they do it in places where rents are more affordable — areas like Pittsburgh, Kansas City and Oklahoma City, where rents take up around 25 percent of people’s incomes. They also go solo in metros like Virginia Beach where they can afford to buy homes, and places like Austin with strong employment growth. And I don’t need 100 channels on cable.” Millennials living alone make $38,800 a year (median) in Columbus, where people spend 26 percent of their incomes on rent. They make good money — $66,000 for millennials living alone in San Francisco and $72,000 in Riverside (medians) — but people who live in those places spend 46 percent and 36 percent of their incomes, respectively, on rent.


Income Inequality Is Skyrocketing, Especially In These 5 States

The principal factors evaluated were the mean household income and median household income in 2011; their growth over the five years from 2011 to 2016; and the consequent growth in the gap between mean income and median income, which is an indicator of worsening wealth inequality. Three of the top five worst states for income inequality rank among the most populous states in the country: California, No. Massachusetts 2011 mean income-median income gap: $22,596 2016 mean income-median income gap: $26,341 Five-year increase in income gap: $3,745 | 17% Income inequality in Massachusetts is among the worst in the country. Although the 2000s dotcom bubble saw the biggest discrepancy develop between what the top 1% and what the bottom 99% earned, the income gap has only steadily gotten worse since, according to data from GOBankingRates. California 2011 mean income-median income gap: $23,516 2016 mean income-median income gap: $27,366 Five-year increase in income gap: $3,850 | 16% Income inequality in California has worsened significantly since the turn of the millennium. Washington 2011 mean income-median income gap: $17,614 2016 mean income-median income gap: $21,174 Five-year increase in income gap: $3,560 | 20% Washington is home to Seattle, the scene of a booming tech industry whose growth has fueled a population and housing surge to an unprecedented level for the state. Both the Seattle metro area and Washington state overall have a top 1% that earns more than 24-times that of the bottom 99% of households, according to recent data. The mean income, however, rose from $58,849 to $65,401 — an increase of $6,552 in average household incomes over five years versus just a $3,000 increase for median incomes. North Dakota 2011 mean income-median income gap: $14,691 2016 mean income-median income gap: $19,714 Five-year increase in income gap: $5,023 | 34% The good news for North Dakota is that its rates of growth for both mean and median household incomes rank among the highest nationally. The bad news is North Dakota has experienced the biggest growth in mean-to-median income discrepancy from 2011 to 2016: An increase of 34%, which has created a current gap of almost $20,000 between mean and median household incomes.