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South Florida millennials are becoming a rental society

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Services for Real Estate Pros 0659282

South Florida millennials are quickly becoming a rental society.

There is a lot of blame to go around.  We always ask ourselves why millennials aren't buying now when it's a very good time to do so.  There are many reasons for that.  So without further ado;

Millennials have been completely priced out of the market.  They are just starting out in the world, the workforce, and in relationships, so money is tight.  There was a time when $200K would get you a fine home here, but now there is nothing out there in a three bedroom less than $300K.  You really have to be prepared to spend at least $350K to live in a nice South Florida neighborhood.  Greedy homeowners want more than their home is worth -  what else is new - and cash buyers, whether investors or foreigners, are very tough competition for a new family just starting out.  Does anyone want to help them?  I've already had that experience several time and the answer is no.

Millennials cannot get a loan.  All this talk about lowering rates and how much banks want to help, but in the end they really only want A+ paper.  Millennials are too risky. 

Millennials are scared of the future.  Let's face it, these people have never risked this much money before.  It's a big move for them.  If there is the slightest fear of losing money because of a housing meltdown again then they will bail in a hurry.  They like playing it safe.  Just because a neighborhood or home has been rising in value and has people waiting in line to buy it doesn't necessarily mean that it is going to continue for them.

Millennials have too much debt already.  Student debt, a new car, etc. has eaten away at their income.  Some don't even have a job yet.  It just doesn't make sense to buy a home and get themselves into more debt.

Millennials are career minded first.  They want to procure a good job or start their own business first and focus on that before jetting off into buying a home.  It's the furthest thing from their mind.

And finally, in most instances down here it is indeed cheaper and easier to rent.  Take Miami, for instance.  Over 57% of the city's condos are rented and they are not even finished building the new units yet.  Millenials love living and working nearby.  It's easier on the gas tank. 

With rent you pay one price and don't have to worry about anything else.  Owning is a nuisance.  It doesn't end with the mortgage.  Next you have maintenance dues every month, and they, by the way, never go down.  Then there are property taxes.  And yes, they never go down either.  Then there is the ever increasing and hard to get insurance.  Absolutely brutal.  And let's not forget about the everyday fixing and maintenance that goes along with home ownership like cutting grass or changing a light bulb.  Your hope as a homeowner is that your investment will go up by the time you move or retire so that you can recoup your money.  This, however, is not guaranteed.    And let's not forget that if you have an emergency repair at your home and you are not prepared for it financially you are royally screwed.  I'm talking about a leak or broken AC unit. 

Now, add all things together and you understand why millennials are looking away at homeownership in South Florida.  Have I sufficiently scared you enough yet?  My hope is that prices stabilize and these people come back into the fold.  This will take a village to make happen though.  If you want them to come let's make home ownership more financially appealing before South Florida becomes priced so high that only the wealthy can afford to live here.  They are the key to our future development believe it or not.  We cannot subsist as a society on baby boomers alone because they won't live forever.  There is no reason why a young family with proper employment and a solid education cannot find an affordable, quality home down here.  Yet, that is exactly what is happening. 

 

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Morris Massre
https://about.me/mmassre
 

 

Comments (2)

Captain Wayne - Rowlett Real Estate School
Rowlett Real Estate School - Panama City, FL
Rowlett Real Estate School / Owner and Instructor

Excellent post about the Millenials.  Thanks for sharing your views.

Jun 01, 2015 12:21 AM