Millennials are the missing piece of the market puzzle.
I was watching a video this morning that was talking about the Millennials and how they are the missing piece of the current real estate market. It got me to thinking about why that might be.
The first thing that came to my mind was that they are not driven to own homes the way previous generations were. The boomers were raised during the 50’s and 60’s and family was the focus of a life. We were encouraged to get out of school, get a job, and marry. Many boomers did not go to college because they simply could not afford to do so. Financial aid was not as readily available and if there was no money, children were pushed out of the home to get jobs and become self-supporting. Getting married and starting families followed close behind. Naturally home ownership was the next step. With good paying jobs and families on the way, home ownership was a natural progression.
Today that is no longer the case. We have a massive population of young people with crushing debt from their college educations who cannot find jobs in their proven professions. They are educated beyond working in any kind of a trade and are either underemployed or not working at all. They find it easier to rent or live at home than to settle for less than they feel they deserve. While I don’t necessarily agree with that thought process, it is the prevailing one.
With the change in values, getting married and starting families is not a priority. Buying a home is not necessary and buying anything less than the perfect home is not desirable. A starter home is not an option. Add in high debt loads, difficult lending guidelines, and high home prices, millennials are not buying homes. Further, having watched the economy tank and living through the foreclosure crisis, many are also wary of making such a big commitment. Home ownership is no longer seen as an opportunity but rather as a burden. It is sometimes viewed as a necessity as lifestyles change but not a desired goal.
I know some markets are booming and are dealing with a shortage of inventory. That however does not carry over to every market. Millennial buyers are still missing from the marketplace and unfortunately will undoubtedly continue to be MIA. I believe it is because many cannot find good paying jobs, and the cost for payments, upkeep and maintenance, is beyond their ability. Many are choosing not to take on homeownership because it is seen as a burden they do not want to deal with. It is simply easier not to do so. Until economic conditions improve and maturity brings lifestyle changes, homeownership is not going to be seen as a desirable goal. This could be troublesome for the real estate market for quite a while. We can only hope that economic conditions improve and prices level off to a point where homeownership is seen as a desirable goal rather than a burdensome necessity.
Thanks for reading, until next time…..
Sandra Paulow, Associate Broker, GRI, REALTOR®
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