Baby Boomers vs. Millennials on Housing Market
“Real estate investing, even on a very small scale, remains a tried and true means of building an individual's cash flow and wealth.” -Robert Kiyosaki
Berkshire Hathaway HomeServices released results of its latest Homeowner Sentiment Survey indicating that current and prospective homeowners remain optimistic about the current state of the U.S. real estate market. Respondents cite higher home values, increasing housing inventory and low interest rates as the main reasons for their optimism. Baby Boomers show more optimism about rates than they used to, and Millennials are unsure that rates are even considered 'low.' Patrick Henry, CEO of QuestFusion, a business consulting firm here in San Diego laughs out loud at this, stating that Millennials have no idea how low the rates really are. Patrick and Amanda Cascadden, Realtor with Berkshire Hathaway Homeservices in Rancho Santa Fe, debate how they feel about the real estate market and mortgage rates in this video; take a look:
Millennials are a lot more optimistic about the market these days. They believe that owning a home is a big part of the American dream, and Amanda believes that they want to own a home, whether it takes longer, and even if they can’t really afford it. Even where she lives in Carmel Valley now, they’re building everywhere, and these homes are selling. Older Millennials who have established themselves and started a family, are getting excited to buy a home in San Diego.
Patrick says what he has seen since the recession in late 2009 is that the home market has never really fully recovered and he feels the homeowners are kind of stuck in an interesting issue. They don’t want to have a foreclosure or a short sale, but their homes are worth more than what they paid for them. He thinks that causes a problem, even with interest rates as low as they are. So why are Baby Boomers more excited than they have been in the past to own a home? “The economy is ok, we are in a slow growing economy, the Fed isn’t defaulting on our trillions and trillions of dollars debt, so things are getting better. Boomers are more worried about things like that,” says Patrick. He also thinks that real estate is very hyperlocal, and the markets differ greatly from area to area.
If you look at the local San Diego market, where homes are above $2 million, the market is slower. Whereas the homes priced lower than $1 million seem to be getting a lot more action. Except on the coast, where properties are going quick no matter what the price is. There is a pretty good balance of supply and demand, so as long as your planning to live somewhere for 10 years or so, owning a home is a very good thing.
How do you feel? Is the real estate market booming? Or is the lack of excitement from Baby Boomers getting you down? We’d love to hear from you, and if you’re looking to buy or sell in San Diego, consider the Indra Group. We work with clients in all price ranges, and are happy to talk with you anytime about your homeownership goals and how we can help you achieve them.
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