Ten years ago, in the wake of the real estate market crash, some thinkers predicted that many young adults would disavow homeownership in favor of lifelong renting.
As it turned out, their predictions were greatly overstated.
“When a couple gets pregnant or wants a dog plus a fenced yard for the dog to run in, that’s when they get extremely serious about buying a house,” says Ashley Richardson, a veteran real estate agent affiliated with the Residential Real Estate Council (crs.com).
Given that the economy remains strong and mortgage rates low, Richardson and other real estate specialists expect 2020 to be a near banner year for home sales to millennials.
“This year we’re facing a huge amount of pent-up demand among buyers,” says Richardson, who sells property through the Long & Foster realty company.
Aspiring first-time buyers in many popular metro areas face nearly unprecedented challenges in their quest for ownership, according to Tom Early, a longtime real estate broker and past president of the National Association of Exclusive Buyer Agents (naeba.org).
“In recent years, price increases have vastly outstripped wage gains for many young buyers. At the same time, inventories of entry-level property have been as tight as a drum in lots of places where people want to live,” Early says.
Largely because of the challenges they face, many would-be 2020 homeowners are already taking preparatory steps for a purchase. They’re attending home-buying seminars, cleaning up blemishes on their credit reports, seeking mortgage pre-approval and surveying property online.
Here are a few pointers for motivated first-time buyers:
-- Screen for experience when selecting a real estate agent to assist you.
People who are seeking to buy a first property are advised to search for an agent who has years of experience selling homes in their targeted area.
Before you start looking at specific properties, a strong agent will supply you with data on home prices and valuation trends, relative school performance statistics, and information on nearby amenities, such as parks and hiker-biker trails.
-- Fire any agent who tries to rush you to buy before you’re ready.
Though most agents are compensated on commission and therefore don’t make any money until a sale goes through, a reputable one won’t try to hurry you into a purchase before you’re ready, says Eric Tyson, a consumer advocate and co-author of “Home Buying for Dummies.”
Of course, it’s not fair to ask the agent to spend multiple weekends over months showing you property unless you’re progressing toward your goal of finding the best available neighborhood and home in your price range. Every veteran agent has had to cut ties with clients who looked continuously without any serious intention of buying.
Still, as Tyson says, it’s not unreasonable to spend multiple months doing intermittent (yet focused) outings with an agent before committing.
-- Supplement your search with visits to open houses.
If you’re planning a major housing change, like moving from a downtown condo to a detached house in the suburbs, you needn’t rely solely on your agent to help you sort through your choices. You can do much of the footwork on your own.
“By visiting a lot of open houses, you can narrow down what you do and don’t like in a home,” Early says.
Many open houses are heavily advertised with street signs posted by the listing agents for the properties. If you’re considering a condo purchase, however, Early suggests you also consult newspaper advertising or online listings for open-house details.
-- Look to neighborhood residents for local information.
As you develop a short list of housing alternatives, some of the most useful sources of realistic information are those who live and work in the areas you’re considering.
“People usually know their neck of the woods as well as any professional who sells property there. Unless they’re trying to unload their home, the neighbors will tell you the real skinny about traffic tie-ups, school problems and noise issues,” Early says.
What’s the best way to approach neighborhood residents? He recommends you walk through the community on a weekend afternoon when many people are likely to be out in their yards. Tell them you admire their neighborhood and are considering a move there. Then feel free to politely pose a few questions.
“If people start giving you the cold shoulder, you can bet that neighborhood is unfriendly. For that reason alone, you may want to drop it from your list,” Early says.
(To contact Ellen James Martin, email her at firstname.lastname@example.org.)