What Should Millennial’s Expect in 2018
The real estate trends millennial’s in 2017 we’re filled with bidding wars and record low interest rates. I don’t know about you, but I’m exhausted! However, there’s no rest for the weary, as 2018 is shaping up to be another competitive year.
But more importantly, there are some exciting trends taking shape. As we look ahead to the new year, be sure to keep your eye on these five housing developments.
1. Starters are Getting Scarce
Although many buyers are interested in starter homes, they are getting harder to find. In many communities, the demand for starter homes far exceeds the inventory and has only been exasperated by our current housing drought. The crux of the problem is that builders say their costs for land, labor and materials are too steep to make money on modest single-family homes. To make their margins, they have to scale bigger.
2. Lifestyle-Focused Rental Complexes Will Make You Think Twice
To combat the housing crunch in Madison, Wisconsin, urban planners have had no choice but to build tiny. To optimize profit margins, developers must squeeze as many condos under one roof as possible. Micro units as small as 400 square feet are not uncommon in parts of Madison and Milwaukee. What makes these buildings different from those constructed in the past are the high-end finishes and amenities that provide residents with a sense of luxury and community feel. Rooftop pools, group fitness classes, spa access and restaurants: These perks help to curb the drawbacks of living in such tight quarters. And your generation is taking notice: a large percentage of millennial home buyers consider purchasing these condos. Madison’s skyline shows the changes 2018 is already bringing our housing market this summer.
We’re sure to see more of these communities around Madison’s urban areas where developers must build up to overcome land and density constraints. Sun Prairie, Middleton and Verona have started to move along with this real estate trend.
3. Real Estate Marketers are Finally Getting You
Beautiful homes have been dominating my social media feeds lately. I’m definitely not complaining as I’m one of them, just stating a fact. This has been a big year for real estate agents jumping on the social marketing bandwagon. Better late than never as this is surely something we will be seeing more and more. Data now supports that younger buyers are more dependent on visuals when it comes to the home purchase. Savvy listing agents are catching on and building complex web funnels to generate leads. High-quality visuals are becoming the new norm, as are Facebook ads, Instagram posts and digital advertorial videos. Please stay involved by liking my facebook page.
4. Low Down Payment Programs are Coming to the Rescue
Over half of buyers put less then 20 percent according to the National Association of Realtors. Which begs the question, how low can you go? The answer, is pretty darn low. Due to much lower default rates in the last few years, we as lenders are starting to cautiously loosen up some guidelines.
For borrowers, 0 percent down options with no Private Mortgage Insurance (PMI) now exist if a property is located in certain rural areas. In more urban areas, three percent down loan programs with attractive interest rates are available. Just this year, we saw new programs where lenders actually contributed towards first-time buyer down payments and recently, we’ve seen an increase on maximum debt ratios.
The FHA program continues to change and improve the success rate for first-time home buyers. Since the down payment is a major hurdle to home ownership, these products are breaking down the barriers for young buyers who have little savings. As lenders compete for a piece of the millennial buyer pie, we’ll continue to see creative programs and financing products launched in 2018 and on into 2019.
5. Gen Z is Right Behind You
With half of all buyers being under the age of 36, your generation is driving more of the housing market than we previously understood. Housing developers, real estate investors and listing agents have gone to great lengths to attract and market to young buyers. Now, a new cohort is coming into the fray – Generation Z. Born between 1995 and 2010, this subset of buyers is accustomed to on-demand information and services. Even in their young age, over half (57 percent) of Generation Z renters consider buying instead of renting. Comprising 21 percent of the American population, these individuals are just now graduating college and are sure to rapidly gain influence and power in the housing market – and perhaps drive major change.
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Barb Miller NMLS#929071 – PrimeLending | 608-206-2988 | firstname.lastname@example.org | Apply For a Loan