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So my wife and I took the plunge - we purchased a home in NJ. Both of us grew up in NJ (her in Monmouth County, me in Union County), so we are very familiar with the state. After several months of searching, we decided to purchase a freshly renovated home in Somerville for $270,000.
As a millenial (I'm 25) and a first time home owner, I just wanted to share a few thoughts/trends that I noticed and that I can feel from the process. Take from them as you will, but I figured this might help some people my age looking to buy/others looking to sell/contractors, etc.
1) Young professionals are in no rush to buy, but they will get there. Don't expect "millenials" to buy homes until they are in their 30's. My wife and I are a BIG exception. There is alot of (in my opinion) nonsense out there about why renting might be a better move than buying and my generation is eating it up. This is a generation that hasn't had to have responsibility for anything. Why should we want to work on maintaining a home or apartment when a landlord can do it for us? That being said, they will come around. It will just take longer for them to get there, which is why statistics are showing that "millenials aren't buying". They aren't at the age yet.
2) Young professionals love urban areas. Gentrification of Hoboken, Jersey City, etc. is not a coincidence. We love being able to walk a downtown, enjoy nice restaurants, and have a sense of community that you don't get from isolated suburbs that you find in, say, Monmouth county. We value this FAR over "privacy" or anything like that. This is a generation that knows what each other is doing at all times via the internet. Being alone on a 15-acre lot in the farmland detached from everything seems miserable. This is part of what went into our decision to buy in Somerville - walk-able downtown and sense of community, even if a bit transplanted.
3) Millenials love "name brand" and "new looking". Starbucks, Target, etc. When we see "name brand" stores, it screams out "investment" in the town. Unfortunately, run-down towns tend to have more mom-and-pop stores and older architecture when we were growing up. Union Center in Union County is a great example. I don't think this is right, but it is a fact that millenials analyze like this. Somerville having a Starbucks and a revitalized center, for example, is almost a sense of comfort for many of them.
4) Student debt is pricing us out. Unlike previous generations, we have tens of thousands (if not hundreds of thousands) in student debt. Couple with this increasingly stringent mortgage rules after the crisis and you will find that millenials simply will not be able to buy in "nice" areas and will instead choose to buy in "up and coming" areas where they can see the town turning around (a la somerville, Asbury Park, etc.) Obviously this is income dependent, but on the whole you will see young professionals begin to flock to more "urban" suburbs with connections to major urban centers that offer a better value simply because it is what they can afford. Areas such as Hoboken and Jersey City, millenial meccas, are simply too expensive to buy for a vast majority, but we still want to live there. Hence the rental phenomenon.
5) Millenials don't mind "fixer uppers" and ignore previous generations' preconceived notions about areas. This includes both towns and the homes themselves. This comes from the "gentrification" mentality of making things better. Rejecting the notion that a town is "bad' just because our parents generation says so. The same young people renting crappy, roach infested 1-bedrooms on the border of Brownsville and Crown Heights in Brooklyn despite warnings of danger, just to be "close to the action", will be moving away from the city soon due to prices but still want a way to get there. Expect these people to look at towns like Plainfield, Elizabeth, Newark, etc. with a far more accepting eye than the generations that lived through the riots.
6) Millenials don't mind a commute. Public transportation is very important to us. I commute for 2 hours a day consistently. We are still young and are willing to put up with it. This will likely change as more and more of us have children, etc.
Obviously, I can't speak for an entire generation, and this only goes for millenials IN THIS AREA, but these are my anecdotal observations. Take from it what you will!
If you are trying to sell to the younger generation, focus on a downtown, commute, etc. and you will get much more success.
If you are waiting till 30's to buy a house, and likely plan to or have kids already, then the town's school system will be as important as the other factors.
Basically, nothing new in terms of what people look when buying a house. Commute, Schools, town/neighborhood.
If you are waiting till 30's to buy a house, and likely plan to or have kids already, then the town's school system will be as important as the other factors.
Basically, nothing new in terms of what people look when buying a house. Commute, Schools, town/neighborhood.
To an extent. Everyone my age just reverts to "There is always private school!" without I think fully understanding the cost attributed with that.
If you are waiting till 30's to buy a house, and likely plan to or have kids already, then the town's school system will be as important as the other factors.
Basically, nothing new in terms of what people look when buying a house. Commute, Schools, town/neighborhood.
I would argue that the one big difference is that booming "suburban sprawl" towns like, say, Manalapan, East Brunswick, Millstone (Mon. County) etc. will be a much harder sell for my generation than they were for Gen X and Boomers. There is simply nothing appealing about those towns save maybe the schools. Taxes and prices are too high.
I think the biggest factor that causes people to wait until their 30's to buy a home is that they need more time to save for a down payment. I know so many people who were ready to own a home in their 20's, but simply did not have enough money saved for a down payment. When you factor in the difficulty in finding a job after college, plus excessive student loan debt, the ability to save money becomes increasingly difficult for many people.
The only item I disagree with you on is the commute. There is no way I would spend 2 hours a day commuting. When I was in my 20's I switched jobs 3 times. Each time I changed jobs I moved so that I would be close to work and not have a long commute. When you're young it doesn't matter so much where you live and most younger people have flexibility. When you get older and have kids, then you need to factor in good schools, spouse's commute, and things like that, so people tend to be tied down and put up with longer commutes.
I think the biggest factor that causes people to wait until their 30's to buy a home is that they need more time to save for a down payment. I know so many people who were ready to own a home in their 20's, but simply did not have enough money saved for a down payment. When you factor in the difficulty in finding a job after college, plus excessive student loan debt, the ability to save money becomes increasingly difficult for many people.
The only item I disagree with you on is the commute. There is no way I would spend 2 hours a day commuting. When I was in my 20's I switched jobs 3 times. Each time I changed jobs I moved so that I would be close to work and not have a long commute. When you're young it doesn't matter so much where you live. When you get older and have kids, then you need to factor in good schools and things like that, so people tend to put up with longer commutes.
With 3.5% down FHA loans it isn't as hard as it could be with 20%. There are of course tradeoffs for that. But you are certainly right about the first point.
On the second, I think millennials are obsessed with "equality" in the home which means having both parents have equal time dealing with their children. One parent coming home at 8:00 PM from a commute from the city sounds like a nightmare when I talk with friends and family. Both parents coming home at that time would mean babysitter and a higher expense. Which is why I think commute distance will actually DECREASE the older we get. But that is just my opinion.
Millenials aren't buying houses for the following reasons.
1. To your point they prefer to live in areas within walking distance to bars, restaurants in homogeneous communities meaning areas of people the similar age and lifestyle.
2. The areas they want to live have been bought up by property management companies, and they have been priced out of the market.
3. It makes no sense to buy a house (in this market) unless you are committed to living in the same place for a minimum of 5 years just to break even.
4. The median age for millenials to have their first child is 34 for women and 36 for men, meaning people are delaying buying the house in a neighborhood with a good school system.
Millenials aren't buying houses for the following reasons.
1. To your point they prefer to live in areas within walking distance to bars, restaurants in homogeneous communities meaning areas of people the similar age and lifestyle.
2. The areas they want to live have been bought up by property management companies, and they have been priced out of the market.
3. It makes no sense to buy a house (in this market) unless you are committed to living in the same place for a minimum of 5 years just to break even.
4. The median age for millenials to have their first child is 34 for women and 36 for men, meaning people are delaying buying the house in a neighborhood with a good school system.
These are all things I mentioned, albeit you did it in a much more concise manner .
With 3.5% down FHA loans it isn't as hard as it could be with 20%. There are of course tradeoffs for that. But you are certainly right about the first point.
On the second, I think millennials are obsessed with "equality" in the home which means having both parents have equal time dealing with their children. One parent coming home at 8:00 PM from a commute from the city sounds like a nightmare when I talk with friends and family. Both parents coming home at that time would mean babysitter and a higher expense. Which is why I think commute distance will actually DECREASE the older we get. But that is just my opinion.
It's amazing how much things will change in your life and the predictions that you make now will seem almost laughable when that time actually comes. Trust me. As someone who in their late 20's and early 30's felt almost the same way, now, as I enter my 40's, I'm out of my West Village apartment, have 3 kids, a big house in one of the most spread out suburbs around, with no central downtown and an 1 hour and 15 minute commute. My wife, once a full time teacher, is a stay at home mom. All this makes us both very happy today but would have seemed completely absurd and the definition of misery( aside from the kids) less than 10 years ago.
It's amazing how much things will change in your life and the predictions that you make now will seem almost laughable when that time actually comes. Trust me. As someone who in their late 20's and early 30's felt almost the same way, now, as I enter my 40's, I'm out of my West Village apartment, have 3 kids, a big house in one of the most spread out suburbs around, with no central downtown and an 1 hour and 15 minute commute. My wife, once a full time teacher, is a stay at home mom. This makes us both very happy today but would have seemed completely absurd and the definition of misery( aside from the kids) to us both less than 10 years ago.
Interestingly this is the type of lifestyle my wife and I want and we are chastised by our peers for wanting to have what is considered "traditional" gender roles.
I can't stand my generation sometimes, let me tell you.
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