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Know your market
The bottom line is that different markets behave differently during the fall. According to Zillow’s August Real Estate Market Reports, national home values rose 0.4 percent from July, marking the third consecutive month in which monthly home values rose more slowly than the month prior. However, markets in California, Las Vegas and Minneapolis are still seeing an extremely brisk pace of home value appreciation (2 percent or higher). As we exit this year’s selling season, we will start to see a slowdown in home value appreciation.
Selection is limited
Many frustrated sellers who weren’t able to unload their properties during the busy peak spring/summer buying season may take their homes off the market, particularly as the holidays approach and the action comes to a screeching halt. This means you can expect the selection to be even more limited than it currently is in some markets.
There’s room to negotiate
Was there a home you saw and loved a few months ago? Is it still on the market? If it hasn’t sold after one of the hottest real estate summers since the economic downturn, you likely have room to negotiate. While some buyers will pull their homes off the market, others who have been holding out for the best possible price may now be ready to come down. While some homeowners are determined to get a set price, others may simply want out at this juncture.
Check maintenance areas
Fall is the ideal time to check things such as gutter drainage and the general upkeep of the yard. How does everything look? Does anything need repair? Visit the home on a rainy day and see for yourself. Then go inside and check out the furnace, looking for drafts, leakage issues and other possible structural/maintenance problems. If they’re apparent, determine how much money it’s going to take to get everything up to snuff and factor that into your offer, adjusting your price accordingly.
We all know the obvious and primary factors behind this decline. These so-called millennials — mostly the children of baby boomers — are saddled with student loan debt. The Consumer Financial Protection Bureau estimates that of the roughly $1.4 trillion that Americans owe on school loans, 67 percent of it is owed by people younger than 40. They’ve also got a few thousand dollars in credit card debt, and many are either unemployed or underemployed. With home values skyrocketing and mortgage rates hovering near a two-year high and still climbing, median wages haven’t kept pace and now millennials can no longer afford homeownership.
This issue has gained the attention of policymakers nationwide. President Obama weighed in on the need for more affordable, quality housing as well as many other housing issues affecting millennials in a recent discussion moderated by Zillow CEO Spencer Rascoff.
But here are some of the more personal reasons these traditional first-time buyers — America’s largest generation — are not getting in:
They don’t like what they’ve seen
Millennials have seen their parents struggle firsthand. And they’ve seen their neighbors lose their homes, too. As a result, they’re nervous they could find themselves in a similar position — and all too easily. After all, when you buy on credit, you’re required to make regular payments, regardless of whether you lose your job, your business or are up against unexpected medical expenses. This has many millennials on edge, particularly given the state of the job market.
It’s easier with Mom & Dad
A study from Pew Research reveals that 36 percent of millennials (or 1 in 3) are still living under their parents’ roof. Not since the 1960s have so many young adults (a record 21.6 million) resorted to living at home. And while this trend is driven by a combination of economic, educational and cultural factors, there is a personal reason, too. And it has nothing to do with lack of rent money. By moving back home — a situation that is no longer considered shameful, by the way — many millennials get amenities/perks that don’t typically come with a cheap starter apartment, including food, gas, laundry service, cleaning, job advice and more. No wonder more than 78 percent of millennials living with their parents are satisfied with the arrangement! What’s not to like?
They value mobility
No doubt, this generation is on the go! And while the vast majority say they would like to own a home at some point, it’s certainly not a priority now, especially given the changing work environment. In fact, these days, being geographically flexible (taking freelance projects, short-term gigs and other job opportunities as they become available) may be one of the more valuable tools for earning a stable income. And the reality is that owning a house — and thus being tied down — could limit a millennial’s ability to advance his/her professional life.