Relocating. Moving Up. Downsizing. Moving On …

The New Rules of Real Estate

Real State

The “Recovered” Economy and entry of the Millennial Generation into the home-buying marketplace have reshaped our real estate world in surprising ways. I’ve collected excerpts from Consumer Reports’ “The Real State of Real Estate,” March, 2016 issue to share with you:

The Recovered Economy:

  • In 2012, 1/3 of all homeowners owed more on their mortgages than market would bear.
  • U.S. home prices, adjusted for inflation, have barely appreciated year to year over the past 120 years, according to Yale economist Robert Shiller.

The Millennial Effect:

  • Millennials were the top buying demographic in 2013 and 2014.
  • 41% of millennials who rent still owe $30,700 on average in college debt and almost 25% pay more than 50% of their income for housing.
  • Millennials are looking for proximity to friends and family, short commutes, and walkability in housing.
  • Millennial buyers are looking for move-in ready homes; they don’t want to have to renovate or do a lot of work.
  • “When a home is move-in ready and buyers know they can be cooking in the kitchen from day one and entertaining in the backyard that very weekend, you know you’ve got a winner.”

The Singles Market:

  • The expectation is that by 2025 there will be as many single-person households in the U.S. as there are homes with families.  In 1985, single women accounted for 10% of buyers.  By 2005, single women accounted for 21% of buyers; single men accounted for only 9%.

Boomers and Bouncebacks:

  • Boomers now head up 40% of U.S. households and control 54% of total household wealth.
  • A 2015 survey by the Demand Institute found that 2/3 of boomers plan to stay put, often in the same suburban homes where they raised families.
  • The 36.4% of women ages 18 to 34 who lived with their parents in 2014 was the highest level since 1940. Even more adult men (42.8%) lived at home in 2014.

Advice for Sellers:

  • Let the following renovation rules, driven by shifts in the current housing market and informed by Consumer Reports’ nationally representative survey of 1,573 millennials, inform your decisions on improving your home and its value:
    • A modern/updated kitchen topped the list of ideal home features in a survey of millennials.
    • You should be able to add a new suite of appliances as well as a new countertop and flooring for $5,000.
    • Quartz has started to challenge granite and marble as the go-to material in higher-end kitchens. Expect to spend $40-$100 per square foot, installed.
    • An “open floor plan with flexible living space” was second only to an updated kitchen on millennials’ list of most desired features.
    • “Your home has to look better on the day of the open house than it’s ever looked before.” – Steve Clark, a real estate professional in Los Angeles.

Click here for the full story at www.consumerreports.org