Generation X Changes Housing Market for Millenials
You may have heard rumbling that there is a shortage of homes in the market for sale and wondered why. To fully understand todays market requires some knowledge of the generation numbers and their effects on homes for sale, buyers and the renters market.
Generation X, born between the years of 1965-1984, numbers 83 million. According to some experts, they came into the housing market at the wrong time. In 2004, Generation X homeowners reached an all time historical high of 49.5%. Today 10+ years later those historical averages are 7.0-7.9% below average for that generation. What happened? Many entered the market purchasing overvalued properties with high-risk loans that left them overextended and vulnerable. Some, as a result went back to the renting market, losing money on their investment and others are just catching up. Traditionally, that age group today would be ready to move out of their starter homes to larger homes. A fact that often, is not true for that generation today.
Now comes the following generation, the Millenials ( Gen Y) born between 1985-2004. Their sheer numbers present a problem. They are 87 million strong and by 2025 will rise to 93 million due to immigration. That is 10 Million more than Generation X before them. Even if the market had not undergone any changes, there would still be more Millenials looking for entry market homes than numbers available. Adding to that is the fact that many Generations X are staying where they are, lowering the number of starter homes on the market.
Meanwhile, the rental market is seeing an increase of 3 million more renters in Generation X and that number, coupled with the milleniums who would like to buy but cannot find a starter home, has driven rents steadily higher.
This may seem like doom and gloom, but even with the above facts, the National Association of Realtors (NAR) reported that pending home sales hit the highest rate since May 2006. According to Ron Peltier CEO of Home Services of America, "The confidence has returned to housing, not only as shelter but as a good long-term investment." However, low inventory and stronger demand brought on by an improving economy has had an effect on home prices. This is where it is vital that you consult a Real Estate Expert. He or she knows the market and will have your best interests at heart. A buyer or seller in todays market needs to know what is going on and how best to proceed. I put my clients first and make it my mission to find the best possible buyer at the best fair market price for the sellers property! Call me, Wayne Liddy 519-436-4810 Royal LePage Peifer Realty Inc. Brokerage Chatham-Kent today.I pride myself on old fashioned service coupled with today's technology. Proudly serving the great people of Chatham-Kent in Real Estate since 1986.