The Home Buyer's Korner

Information presented should be used for educational purposes only.

January 19th, 2016

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NASHVILLE, TENNESSEE

Home Buyer’s Korner

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Understanding the Millennial Home Buyer

Milliennials

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The passing of generations has brought immense changes to the real estate market. Gone are the days that people follow this golden rule in life: Finish school, get a job, get married, and then buy a house. Millennials are not so keen on subscribing to this old school way of living, especially the part about buying a home outright. This generation is all about having options and doing things their own way, and it’s something they exercise when it comes to a residence. This result is Millennials have developed a different approach towards home ownership. 

Naturally, this changing of the guard didn’t go unnoticed. The real estate market is bending backward just to keep up with the demands of the Millennials and structure their business around them. So, how are these younger people different from their parents and grandparents in terms of home ownership? Here are the things you need to know about millennial homeowners.

They are open to renting for the long term

For Millennials, home ownership can be a very heavy burden that can strip them of life’s other pleasures. Unlike their parents or grandparents, this generation makes allotments for travel and going out, luxuries that they may be forced to forego if faced with mortgage payments. Outstanding debt is another factor why Millennials choose renting. Most of them are saddled with student debt, something that they may have to deal with for a long time. Adding home mortgage to their obligations can cripple them financially. According to a survey, “student loan debt is the largest obstacle to home buying among those who have debt. Further, 24 percent of respondents knew someone who had delayed a home purchase because of student loan debt.” 

Also, renting gives them the flexibility to relocate when the need arises, whether for employment reasons or just because they want to experience living in other places. 

They put a premium on convenience

 Living closer to work or school is a huge convenience.

The previous generation would normally save up to get a big, rambling house in the suburbs as preparation for raising a family. Millennials are not so stuck on the idea, citing convenience as a prime consideration. They don’t like the long drives that come with living in the suburbs. They would rather stay near their workplace and save time and money in the long run. Given their preference for work-life balance, they would rather make do with a smaller condo space than spending hours commuting to a bigger house on the outskirts of town.

They want to be at the center of everything

Their desire for convenience extends beyond their need for shorter travel time. Millennials, especially the unmarried ones, are maintaining social activities that take place within the city. This is why condominiums are a very attractive investment prospect for Millennials. Condo buildings are situated in prime locations and are just a short walk or drive away from places that matter to them, such as malls, restaurants, and other places of leisure. Condos also provide home security for Millennials since every building has guards and CCTV cameras in place. 

They are open to owning homes

 Buying homes can be part of the plan.

Not all Millennials have closed their doors on home ownership. Surprisingly, they can be open to the idea as much as their parents and grandparents are.  According to a survey, “many renters aged 18-34 see their current ability to own, not a lack of desire to own, as a primary reason they remain renters.” They believe that owning is more practical for the long term because it protects them against rent increases. Many Millennials are actually working towards buying their own properties. They see renting as a temporary solution while they are still saving up to buy their houses. According to a report, “38 percent of Millennials said they either would or have put off a wedding or honeymoon in order to save for a down payment on a home.” 

They are particular about high-tech conveniences

Whether they are renting a home or currently living in their own home, Millennials agree on the convenience that technology can bring them. It doesn’t matter if they are actually spending a lot of time in their dwellings; they want things done at a push of a button whenever they are around to enjoy their homes. Developers have taken note of this when considering home design for Millennials. For instance, having a modern kitchen is a must for this generation. Since they are busy and hardly have time for chores, they appreciate tools and machinery that makes living easier for them, like microwave ovens, coffee makers, and dishwashers. Smart technology is something they highly appreciate as well. They won’t refuse the luxury of having automatic or remote light and temperature control. 

They can stay in their parents’ homes

Staying with the family is a practical option.

There was a time that once someone turns 18, he can’t wait to hightail it out of his parents’ house and get his own place. Times have drastically changed since then – young adults are forced to become practical when it comes to money. What a perfect way to save lots of cash than staying with their parents? These Millennials would rather cut back on the liberties afforded by independent living just to save on rent money. Unemployment is also a major factor here. There are places in which jobs are scarce, which makes independent living a luxury that not all can afford.

Given these considerations, the real estate market has to go along with the demographic shift if they want to make good business. Adjustments have been made by developers to cater to the changing times. Right now, condo units have become more accessible to the younger working class. Units have become more affordable and terms have become more flexible. Amenities and facilities have been upgraded to appeal to urban dwellers who want convenience and comfort. These adjustments are necessary in order to encourage reluctant Millennials to rent or buy homes.

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Here are just a few of the home improvements

you might consider with any Home Renovation loan

Repair or replace a roof

Install, replace or repair gutters and downspouts

Replace, repair or upgrade your HVAC system

Repair or replace plumbing

Install, repair or replace electrical systems

Kitchen remodeling (including the purchase and installation of appliances)

Bathroom remodeling, Full interior painting, Total exterior painting

Repair or replace a septic system and/or well

Disability access (wheelchair ramp, elevator, widen doorways)

Build, repair or replace a deck, patio or porch

Basement waterproofing and finishing

Abatement/Stabilization of lead-based paint hazards

Replace old windows, Room additions, Finish an attic

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Replace a termite damaged sill plate (a water-damaged sill plate also)

Possible landscaping items such as correction of grading & drainage problems,

tree removal, repair a driveway and sidewalks

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