Turtle Creek Gardens’ peaceful pool

Homeownership is the most consistent way to build up the nest egg you’ll need in retirement. People who downsize their homes are cashing out equity built up over a lifetime (and telling the kids they’re on their own). Sure, there are many reports that claim folks who rent in some areas make out better. But they’re always predicated on the renter investing the difference between the rent and the mortgage/taxes – which almost no one does. Instead, flush renters eat out more, buy more shoes (or in my case, shirts) or wend their way around the world collecting selfies.

The increased incidence of renters is troubling in many countries. When I spoke to HGTV presenter Richard Blanco in London recently, he agreed it would have an impact on tenants later in life. While student loans are an issue here, the issue both countries shared was a desire by younger people to live a catered life (as they did with mom and dad) where they farmed out the reality of living.

For those smart enough to embrace property ownership, the down payment is often a stumbling block for younger buyers. So without living in your Star Wars-decorated childhood bedroom, how does a potential homebuyer save? Especially when Uptown digs can scrape $3 per square foot per month?

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There are about 79 million millennials in the U.S., and their purchasing power is estimated to be $170 billion per year. This powerful demographic, born from the early 1980s to the early 2000s, now represents the largest group of homebuyers at 32 percent, taking over from Generation X.

But when it comes to millennial homebuyer behavior, it can be difficult to distinguish fact vs. fiction. We looked at information from a recent Pardee Homes and BUILDER survey, information from realtor.com, and the National Association of Realtors to cut through the noise.

millennial homebuyers

Photo: National Association of Realtors

We know that millennial homebuying behavior is different than older generations, like texting vs. calling when contacting their Realtors and extensive use of real estate apps to do their research (be sure to check out our blog post, 6 Ways Millennials Are Changing Real Estate Business for Everyone, to get the full breakdown.)

But what are the specific preferences of this new breed of homebuyer? Read on for 5 unexpected facts about millennial homebuyers and what they want in their home.

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The National Association of Realtors survey looked at multiple facets of the home buying process from mid 2013 to mid 2014. Location was a big factor, as expected.

The National Association of Realtors survey looked at multiple facets of the home buying process from mid 2013 to mid 2014. Location was a big factor, as expected.

First-time homebuyers are being squeezed out, and you gotta move fast to buy! And people are hanging on to their houses for the longest time on record, according to a new study by the National Association of Realtors.

Buyers are living in their homes for ten years, up from six years in 2008, and actually expect to live in their home for 12 years. Some of it is by choice, like hanging on to a fantastic rate after remortgaging, and some by necessity, like too much debt to move, as reported by the Dallas Morning News.

The study looked at the demographics of thousands of home purchases around the United States from July 2013 to June 2014, and its findings speak to many trends we’ve noticed in the market here at CandysDirt.

Take multigenerational homes, for example. We’ve seen more builders offering them, like almost every builder on our approved homebuilder list, from Park Cities to Preston Hollow and north. (I swear Mickey Munir at Sharif&Munir invented the jazzed-up mother-in-law suite.) Texas-based builder Darling Homes is selling multigenerational homes in Frisco’s Lawler Park and Houston area’s Lakes of Cypress Forest like hotcakes.

The survey says they’re right on trend: Since 1980, the number of multigenerational households around the country has doubled, with 13 percent of buyers purchasing one of these homes to accommodate aging parents and boomerang kids in a cost-saving way.

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University Manor is one of those neighborhoods you stumble across and think to yourself, “Why has no one figured this out yet?” Well, I’m letting the cat out of the bag. This is one of the best places to buy a home in East Dallas. Tucked off of Northwest highway just before you get to White Rock Lake, it’s filled with 1950’s and ’60’s homes in a price range that will make your heart go pitter patter.  What’s even more exciting is the mid-century moderns that are being revitalized in this area. Take this little gem I found at 7236 Edgerton.  Drew Jenkins and Keith Smay of HC Alpha LLC have transformed this house into a 21st century classic.

The moment you enter this home you’re enveloped into the central living space.

 

“Stand on the living room side of the kitchen island and look around.” Jenkins said. “This one view is so interesting because it includes the living room ceiling beam, a column at the edge of the kitchen, cool trapezoidal gable windows near the ceiling, the dark modern cabinets, the window above the kitchen sink, the granite counter tops, the backsplash, the stainless steel appliances, and the elegant pendant light over the sink. So many pleasing-to-the eye details come together in such a nice way in that one view.”

He’s right. The house simply exhales effortless style.

Jenkins and Smay are driven by the win-win of their remodels. “ The neighbors of the house win because a vacant eye-sore dragging down their property values becomes a beautiful house that boosts those values.” Jenkins said. “The buyers win because they get a completely renovated, like-new home in an established neighborhood.”

Jenkins has his finger on the first time buyer’s pulse. “We’re finding buyers today are turning away from just-built subdivisions in the suburbs and looking for in-town properties, especially near White Rock Lake.”

In the 1950’s, people began turning away from traditional designs to clean lines and modern styles.

“We’re seeing a similar movement today,” Jenkins said.  Movement is the word. This 4 bedroom, 3 bath hits MLS tomorrow at $329,000 I don’t expect it to be around for long!

 

 

 

 

 

The good news is that home prices rose for a fourth straight month in most major U.S. cities in July, from June, no shocker because we’ve just emerged from the busiest buying season. And that includes Dallas — a whole point (.3) 3%. The bad news is that when you look at last year, home prices are still trending downward, even in Dallas. Experts are warning us, no  duh, the housing market remains precarious and depressed. (And unemployment! And Dodd-Frank!) Prices are expected to decline more in the coming months. So if you are shopping for a home, get ready, get set, dive in now.

Standard & Poor’s/Case-Shiller Home Price Index, which some regardas the Bible when it comes to real estate analysis, showed home prices increased in July from June in 17 of the 20 cities CS tracks. I would not be too giddy that Detroit, Chicago and Minneapolis posted the biggest monthly percentage gains — those cities have been on life support and really, still are. Prices are still falling in Las Vegas and Phoenix, which is not what those homeowners need to hear.

But North Texas prices were down 3.2 percent in July, 2011 from a year ago, the 13th month in a row that local home prices were trending downward. Home values in the D/FW area have been declining since federal housing tax credits for first time buyers expired in early 2010. Still, 3.2 percent not as bad as 4.1 percent, which is how much national home prices have trended downward over the last year. As someone said: it’s basically 2003.

Eighteen of the 20 major U.S. markets in Case-Shiller’s latest survey saw annual home price declines in July. Who was up over last year? Washington, D.C., Boston, Charlotte, Miami (foreign buyers), Tampa — but we are talking negligible amounts.

I’m actually beginning to think though, that this might be the bottom or very close. The reason is inventory: dwindling by the minute. Yesterday, CoreLogic, a leading provider of real estate information, analytics and business services, reported that the current residential shadow inventory as of July 2011 had declined slightly to 1.6 million units, representing a supply of 5 months. This is down from 1.9 million units, a supply of 6 months, where it was a year ago. It also follows a decline from April 2011 when shadow inventory stood at 1.7 million units.

What that means: there may be less distressed inventory coming on the market to drag down home prices. That slowdown could be driven by a a slower pace of disposing of new delinquencies, too. Keep in mind that the vast majority of distressed assets are below $500,000.