Generation rent is looking to become generation buy

Generation Z is just entering the housing market, but their impact will be felt across the real estate industry.

Why? Because they value owning a home. In fact, according to a Realtor.com Gen Z Survey, 72% of those surveyed plan on buying a home in the next five years. And, like the millennials, they found a prime opportunity to save for a down payment during COVID-19, when they were able to curb spending. 

A Zillow survey of Gen Z (ages 18-26) and millennials (ages 27-40) showed that 83% saved money in at least one spending category during the pandemic. Almost three million have moved back home since spring 2020, according to Zillow. When asked what they plan to do with the cash, some 59% plan to use their savings for a down payment on a home.

Jonathon Aper, a Gen Z college grad who works in finance, recently purchased a home in North Texas. The pandemic lockdowns allowed them to save by cutting expenses like entertainment. Working from home meant lower gas bills, as well. Aper and his wife were looking for homes to meet the needs of an expanding family. They settled on a pre-owned home and planned to invest in renovating and reconditioning the house. Aper sympathizes with fellow Gen Zers and Millennials who are struggling to find a house in this market. 

Rising prices make it challenging to find something affordable. “The best advice I can give to Gen Zers is to hang in there. You’re not going to get [the home with] your first offer. It usually doesn’t happen that way,” he said. 

“Nowadays, houses are off the market so fast, your real estate agent [can’t] sit there and [say], ‘Hey, I’ve got these three houses for you to take a look at today. Let’s go ahead and plan a time.’ You have to do your research on realtor.com, Zillow, and reach out to your real estate agent and say, ‘Let’s look at this tonight!’ Otherwise, they’re going to be [gone]. The process is very fast.” 

What’s holding them back?

According to the Realtor.com survey, the holdback for Gen Z to purchase a home is job stability. Nearly half of those surveyed are employed. Some 45% of Gen Zers are already saving to buy a home, and 75% did not leave their current living situations to save on rent. Another 17% of those who did move only saved money to put toward a down payment. 

What’s the rush to buy a house, and what are the concerns that Gen Zers are facing? 

• 50% want more room for growing families.

• 49% see themselves living in the suburbs, while 19% said they prefer the space.

• Half are concerned about the economy and job stability.

• 43% of those can’t afford desired neighborhoods

• 34% are still in college.

Rachel Stults, the deputy editor of Realtor.com, said affordability is the key for most Gen Zers. They want to know they can get a good home and build on it later. 

“From exploring metros that offer both jobs and more affordable housing to saving for a down payment, Gen Z homebuyers know how crucial it is to have a financial leg up when it comes time to buy. If they can learn anything from the experience of the millennial generation before them, it’s the importance of laying the groundwork so that they can act quickly on a home in their budget. Prospective buyers should also plan for what they’ll do if mortgage rates increase or other housing market conditions change quickly, particularly coming out of the pandemic. In short, whether they plan to buy in two years or ten years, prospective Gen Z homeowners should be thinking several steps ahead.” 

Who’s influencing decisions?

According to Zillow, when it comes to the decision-making process for purchasing a home, including the financial aspects and deciding on home features, most millennials and Gen Zers reported discussing their housing decisions with their parents (71%) and friends (61%). Half discussed their housing decisions with their siblings, while not quite a third (29%) discussed them with their grandparents. They were least likely to report discussing their housing decisions with their social media followers — only 16% reported doing so.

Among millennials and Gen Zers who already own a home or have tried to buy one, most reported that the opinion of a significant other (60%) or parent (54%) influenced them not to buy a particular home. A smaller number of those surveyed (38%) said the same about a friend’s opinion.

Zillow’s research forecasts that there will be 6.4 million more households formed by 2025 due to a huge wave of millennials now hitting their mid-to-late 30s, aging into their homebuying years. About a third (32%) of Gen Zers and millennials reported that some friends have already purchased a home. 

For now, homebuying is a continuous struggle for Gen Z. It’s an unpredictable market that requires a balance of aggression and patience without overpaying for a home.  (Real Trends)

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Pandemic made living in mountains more expensive, and part-timers stayed longer

Data from a new study confirm that the off-season has gained more popularity in mountain towns.

COLORADO, USA — Mountain town locals know that it has grown increasingly difficult to afford a place to live, and the off-season has become busier as more second homeowners linger into the autumn. Now, a new study of resort areas in Colorado confirms those trends with data.

The Mountain Migration Report found that the pandemic accelerated changes to the economic landscapes and demographics of ski towns. Notably, housing prices skyrocketed to record highs while availability plummeted.

“We already knew that, for a long time now, rent has made up a higher percentage of monthly wages for our locals than is recommended,” said Margaret Bowes, executive director of the Colorado Association of Ski Towns. “But the fact that rents have increased 20 to 40 percent since COVID came is pretty shocking.”

Conducted jointly by the Colorado Association of Ski Towns and the Northwest Colorado Council of Governments, the survey includes responses from about 4,700 full and part-time residents of Eagle, Grand, Pitkin, Routt, San Miguel and Summit counties. Nearly 10% of those respondents are from Pitkin County. The study also includes perspectives from property managers, real estate agents and chambers of commerce.

Pitkin County has the highest rent prices of all the counties surveyed, followed by San Miguel County, which is home to Telluride.

“While rents have long been curtailed in mountain towns by the dominance of low wage tourism-based jobs,” the report reads, “the influx of renters who work remotely has clearly increased rates far beyond levels that local wage earners can pay.”

The recent spike in rent prices falls right in line with a surge in people buying second homes.

“Second homeowners have a much higher income level than our full-time residents,” Bowes said. “They will very likely be able to continue to outbid locals for housing, resulting in continued challenges for our workforce to get into the real estate market.”

In 2020, homes in Pitkin County sold for a combined $4 billion. That marks a 129% jump from the previous year, far and away the sharpest increase of any county included in the survey. Pitkin County also had the largest decrease in percentage of homes purchased by local buyers.

Bowes explained that those trends are unlikely to change any time soon. While they might not accelerate at the same pace as during the pandemic, she doesn’t “see the tide turning any time soon.” And while the shifting makeup of who lives in mountain towns is playing out in the economics of those places, it could also soon have a deep impact on their cultures.

“What I find concerning is the fabric of a community could continue to deteriorate if we can’t have folks live where they work and be able to raise a family in the community where they’ve invested,” Bowes said.

About one-fifth of part-time residents spent more time than usual in their part-time residences in 2020, but an equal portion spent less time, effectively balancing out their impacts over the year. The more significant change was when those people occupied their second homes – staying during the middle of the week and fall months, when they would have typically been gone in previous years.

Locals who felt like their towns were busier than normal can blame that on a combination of many factors – newcomers buying or renting, a surge in short-term visitors and day-trippers, and those part-time residents occupying their homes during times they would not have in previous years.

The report also included suggestions from consultants on how to remedy some of the changes to the housing landscape. For local governments, they proposed deed-restricted housing available only to people who work locally, and real estate transfer taxes. Bowes said Pitkin County’s real estate transfer tax program already generates significant revenue.

Another bit of local advice recommended that governments continue to regulate short-term rental units, expand regulations to include mid-term rental units that house visitors for weeks on end.

At the state level, the report advised that housing finance programs, which are available to people who earn less than a certain threshold of median income, adjust to compensate for the fact that the work-from-anywhere population is driving up statistics for income averages.

Another portion of the survey collected attitudes and opinions about more intangible changes to mountain communities. More than half of longtime residents said parking, traffic congestion, environmental impacts, quality of life and crowds in the backcountry had gotten worse.

More than 80% of all longtime residents felt negatively about the surge in crowds in the backcountry.

“There is more of a willingness than I would’ve guessed to do some more managed recreation,” Bowes said. “There might be an appetite for that, which I found a little surprising and encouraging.”

Get more news like this at 9news.

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Avoid These 6 Mistakes When Upsizing to a New Home

Tired of having your already cramped bedroom do double duty as a home office and at-home gym?

It might be time to upsize. But while getting more space may seem enticing, upsizing can hold pitfalls for unwary home buyers.

“It is important to be aware of these mistakes because upsizing can be expensive, but if you plan it well, do your research, and shop around, it doesn’t have to be,” says Lior Rachmany, founder and CEO of Dumbo Moving and Storage in New York.

Mistake No. 1: Rushing to buy a bigger home

You can’t stop fantasizing about bigger spaces, but take a break for a reality check. You don’t want to ditch your current dwelling without understanding the market and thinking things through.

“Although the frenzy of the current real estate market creates motivation to move as quickly as possible, it is important to be diligent and thoughtful in your decision process,” says John Hollyer, senior portfolio manager at Bespoke Real Estate in New York. “Make sure you understand the market, comparable sales, and value of the house you may bid on. Your broker can assist with an analysis of sold properties and competing inventory.”

And in the rush, don’t get suckered into paying for any conveniences you don’t need, such as expediting certain services.

“A lot of times, when you want service to your old home or upsized home, you are paying more for speed,” says Rachmany.

Instead, allow yourself time to get those things done.

Mistake No. 2: Miscalculating your space needs

It’s important to be realistic about how much space you actually need.

“Assess your space in your current home, and what’s missing or necessary to improve upon it,” says Hollyer. It may turn out that the floor plan or your furniture layout is the problem, and not a lack of space. By the same token, make sure that space in a new home is laid out for maximum usability.

And once you move into that bigger space, live in it for a while, without buying extra furniture, to assess what pieces you really need, says Rachmany. He says furniture needs space to be used effectively, so you can move between pieces without squeezing through.  

“Also, plan your home for everyday use, not for special occasions. People have a habit of buying too much chairs and larger-than-needed sofas for company. But you can always use foldable chairs for that,” says Rachmany.

Mistake No. 3: Ignoring long-term factors

When making any major purchase, try to picture how your life might change in coming years.

“Buying a new home that won’t potentially fit your needs in the future will only lead to another purchase and move that could be avoided with proper forward thinking,” says Hollyer.

He says to make sure to have a realistic projection of how long you plan to stay in the new home, how your family’s needs might change in that time, and whether the home would continue to meet your requirements.

Another thing homeowners often forget is that upsizing brings extra costs that can snowball over time—bigger homes cost more to maintain. 

“Factor in for larger utility bills, and hav

Mistake No. 4: Disregarding financing

Make sure to do your homework on financing, and don’t go in blind when trying to buy a bigger (read: more expensive) home.

“Without accurate information regarding what you are qualified for, you’ll be wasting time,” says Hollyer.

Rachmany suggests leaving it to the experts if you aren’t well-versed in applying for loans or mortgages. Consider using a financial consultant and/or a mortgage broker—ask around for referrals.

“It is very easy to get screwed over by interest rates when applying for loans,” says Rachmany.

And while mortgage rates are at historic lows, experts say you should still compare financing options, which can vary considerably.

“Bigger homes mean larger property taxes, larger mortgage, and larger homeowner insurance,” says Rachmany. “Only upsize your home if you have the budget, realistically, for it.”

Mistake No. 5: Neglecting your current home

Don’t let maintenance of your current home fall by the wayside in your rush to upsize.

Rachmany suggests keeping up the maintenance of your home, and if something breaks, to fix it before you move out.

“In order to capture your current home’s peak value, you want to keep it in top condition,” says Hollyer. “Investing in routine and proactive maintenance of your current property is necessary to provide more value to you when it’s time to sell.”

Mistake No. 6: Spending too much on items for the new home

Upsizing to a new home doesn’t give you carte blanche to go crazy and overspend.

“People have an initial ‘hotel’ experience with their new home, where they leave all their lights on, and just really change their living at home habits and become more wasteful,” says Rachmany.

He suggests holding off on buying all new stuff. Instead, replace items when they break or are no longer usable.

“Extra space doesn’t always need extra items. You don’t have to fill up your kitchen counter with gadgets just because you have extra space,” says Rachmany. “See how much your living expenses change, then get extra items if needed.”

Read more on Realtor.com

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Where do you move after selling in a hot market? To a smaller city

Smaller cities for homeowners selling in a hot market to move to include Sioux Falls, Honolulu, Miami, Orlando and Baltimore.

Homeowners who sell in an overheated real estate market face a conundrum. Even though they often sell their homes for more than they ever imagined, they then struggle to find an affordable place to move.

But those questions have created a boom for small cities. Mortgage originations, or measure of completed mortgage loans, in smaller metros saw a jump in the first quarter, according to data from ATTOM Data Solutions, as homeowners cash in their houses and trade for more space and better remote working conditions.

The five cities that saw the largest number of mortgages originated for purchase included Sioux Falls, South Dakota, Honolulu and three locations in the Southeast.

“Rents are back up in many of these metropolitan areas,” said Todd Teta, chief product officer at ATTOM Data Solutions.

Cities with populations larger than 1 million that saw the biggest increase in first-quarter mortgage lending were nearly all Sun Belt locations: Orlando and Miami, Florida, Tucson, Arizona, and Nashville, Tennessee, along with Baltimore. Overall, ATTOM data found a first-quarter jump in mortgage originations in 85 of 211 metro areas.

With the new census, both California and New York lost seats in the House of Representatives. The Brookings Institution said the decennial census data revealed a continuation of the southward migration that has been underway for the past half-century.

In 1970, the Sun Belt states comprised just under half the country’s population. Today, that has risen to 62 percent, a 14 percentage point increase. This increase was roughly split between the South and the Western regions, while the share of population in the Midwest and the Northeast fell.

Experts say it’s no coincidence that the labor market is also gyrating through an abnormal level of volatility.

Keep reading.

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5 Questions to Ask Yourself If Decluttering Is a Struggle

In The Afrominimalist's Guide to Living with Less, author Christine Platt explores what our past can teach us about letting go.

So much of who we are and how we behave or respond to certain situations is rooted in our childhood.

Whether it's always looking for a deal, our innate response to stock our pantries because we grew up with food scarcity, or even conforming to gender roles, the behaviors and experiences from our childhood often inform our adult spending habits. What we watched, were told, and learned from our caregivers and community often has a profound impact on our relationship with money and how we spend it.

Often, we are unaware of how these experiences impact our lives on even the smallest levels. One of the stories I like to share that underscores just how deeply our childhood influences our adult behaviors involves one of my friends and her dear husband, who has an affinity for using a lot of dish soap when he washes the dishes. To protect their identity, even though there is no shame in any of our childhood stories-we did not choose our caregivers-let's call this wonderful couple Mary and Brian.

One day, as Mary and I engaged in conversation about the husbands we loved but who annoyed us so much, she shared, "I just walked past the kitchen and Brian is in there washing dishes. Girl, the bubbles are literally overflowing out of the sink! I just don't know why he has to use so much dish soap and make such a mess!"

Ever the friend who equally complained about such trivial matters, I laughed. "Well, at least he's doing the dishes!"

"Seriously," Mary said. "He's been doing this ever since we got married. It's so annoying and unnecessary."

Upon realizing this was a true sore spot for her, I inquired, "Well, have you ever asked him why he does that?"

A few days later, she told me that she did indeed ask Brian about his obsession with dish soap bubbles and was moved to discover why. Although he was now successful and quite wealthy, Brian had grown up poor. Raised by his grandmother in the Deep South, most of their household items were purchased at dollar stores and, even then, had to be used in moderation.

Whenever Brian washed the dishes, his grandmother only let him use minuscule amounts of dish soap, just enough to clean the dishes and never enough to make bubbles. So, now that he is an adult, he buys the best dish soap and enjoys making as many bubbles as he wants. Whereas my friend Mary sees a mess, Brian finds fulfillment in bubbles overflowing out of the sink, and enjoys an experience he longed for but never got to delight in as a child.

As you begin the self-discovery of learning about why you have more than you need, think about how your childhood experiences may have knowingly or unknowingly influenced your behaviors.

Think about what your caregivers determined were necessities and how they went about both acquiring and managing them. Consider how they prioritized their spending to meet your family's needs versus fulfilling their personal wants. Reflect on how your circumstances with abundance or scarcity may be influencing your current decisions.

5 Questions to Ask Yourself:

What Did I Learn About Spending and Saving as a Child?

1. Was money-spending and saving-talked about openly in your home? If so, was the discussion healthy or a source of contention?

2. Did you receive an allowance? If so, did you have to "earn it" or was it given freely?

3. How did your family celebrate milestones and key achievements? Were you rewarded with money, gifts, or non-tangible affirmations?

4. What did your family do for fun? Which experiences were considered regular activities, and which were considered "a treat"?

5. Can you identify unmet needs and desires from your childhood? If so, how have they shown up in adulthood and/or in what ways do you find yourself seeking to resolve them?

Credit: Simon & Schuster

Adapted from THE AFROMINIMALIST'S GUIDE TO LIVING WITH LESS by Christine Platt. Copyright © 2021 Simon & Schuster, Inc. Reprinted by permission of Tiller Press, a Division of Simon & Schuster, Inc.

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Related Links

• Selling Your House? 7 Ways to Make Your House More Attractive to Buyers

• Regrets? Nope. New Survey Says 82% of Pandemic Home Buyers Happy with Move

• Everything you need to know about Pet Insurance

If there is a home that you would like more information about, if you are considering selling a property, or if you have questions about the housing market in your neighborhood, please reach out. We’re here to help.

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