by John Crow, Realtor & CEO, Century 21 Northwest
We often hear this generation of young adults described as slackers, time wasters and shiftless late bloomers who fail to launch. My experience is much different. I see them as highly informed and remarkably conscientious. They are motivated to create opportunities, see the world and make a difference in their communities.
Unlike any other generation, they have every answer to every question they could ever ask available to them at the click of a button. Boy do they click. They click and search and stream and consume data at a rate unmatched by any other group of human beings ever. It’s true that they are waiting longer to settle down than those who came before them, but for them life isn’t a race, it’s an adventure, and they live it at a pace that allows them to savor, not just endure.
Prior to the millennial generation, home ownership was synonymous with the “American Dream.” However, the crippling crisis of 2007-2008 has dramatically reduced the percentage of Americans who own versus rent. In fact, even after 10 years of improved market conditions, we are just now back to the levels of homeownership achieved in the early 1980s.
Millennials, or people born from 1981-1996, represent the largest buyer demographic in the nation. The problem is that they are waiting much longer to buy than the age groups in front of them. Why? The leading factors are: They witnessed an epidemic of foreclosure, they graduated from college with fewer job prospects than ever, they chose world travel over long-term debt and serial dating over marriage. Another observation of the Red Bull drinking generation is that they are hungry for sage advice and wisdom. They crave it like they crave $7 coffee and cat memes.
The problem is most of us are too busy hating their music and staring at their shiny beards and tattoos to give them the advice they need. When faced with this challenge, consider these three quick tips:
- You want jobs? Buy a house. When you buy a home you give work to construction pros, appliance manufacturers, the furniture industry, title agents, lenders, deserving Realtors ;) and countless others. When home sales are up, so are jobs.
- You want to save enough money to Snapchat from the Great Wall? Buy a house. Home ownership is forced savings. A recent study was done by Zillow Group’s Trulia. It considered all costs and tax savings associated. The net result of the study found that it is 38 percent cheaper to own a home versus renting the same home. Since culturally we are better at spending than saving, owning a home becomes a forced savings account. That’s because instead of just turning over your rent to a landlord you are partially paying down your principal each month, which is like putting money in a bank. Since homes generally become more valuable over time, the homeowner realizes a compounded return in the form of equity.
- You want to be a difference maker? Buy a house. Homeowners in a city or town are often very invested in the area. They get involved in activities, volunteer for charity organizations and help out with special events. They feel a sense of belonging that is often greater than someone who is renting for a short term. Homeowners often get involved in the politics of the community, attending city council meetings and volunteering for groups and organizations such as neighborhood watches and school boards. In addition, they work hard to keep their properties looking nice. This sense of responsibility carries over into other areas of the community as well. That is not to say that renters don’t have the same intentions, but they often cannot stay in the same place long enough to develop roots and a sense of belonging. Homeownership has far-reaching effects, financial and otherwise, starting with the buyer and continuing throughout the community.