It’s a crazy time for young home buyers in a real estate market that’s moving faster and driving higher prices than ever before. Millennials and their younger counterparts, the Gen Z-er’s, are using the considerable cash they’ve saved during the pandemic to become home owners for the first time. But they’re finding they must be willing to make quicker decisions–and sometimes “settle” for some characteristics in a home that they are not excited about. It’s a different experience than their older siblings or their Baby Boomer and Generation X parents went through in buying their first homes several decades ago.
Zillow, a real estate website, surveyed 1,200 younger adults and found 83 percent of them saved significantly during the pandemic. And 59 percent said they planned to use the cash on a down payment on a home. That couldn’t come at a more opportune time, with Millennials just moving into their peak home-buying years. The challenges they face, however, are often “overwhelming deadlines” and “over price offers” according to research in Southeast Michigan by Crain’s Detroit Business.
Realtors told Crain’s they have to spend a significant amount of time with the young buyers on “education”, helping them avoid paying too much, too fast for their dream home. One realtor described a young couple with a ten percent down payment ready, who rapidly looked at 12 houses, offered on two of them, but lost both to over-asking-price offers. As the realtor put it, the eager buyers forget that “houses are like buses, there’s always another one coming!”
When potential buyers fall into that trap, they chase a particular home, pay too much and have nothing left to decorate or furnish the home. That creates more overwhelming pressure in their lives, even as the pandemic continues to sputter and in places, to rebound, creating more uncertainty. That puts realtors in the position of “counselors”, trying to help their anxious buyers understand that the market is cyclical, prices won’t continue to shoot upward forever, and there’ll likely be another “perfect house” down the road.
