The Rise of the Young Buyer

More Generation Y and Millennial buyers have been able to achieve homeownership because of low mortgage rates and property prices. Much to the surprise of real estate agents, however, many of these young buyers are wealthy enough to skip the starter home and purchase in the million-dollar range. Some are even snapping up multiple properties as investments, believing that real estate is less risky than the stock market. The National Association of Realtors reports that Millennials account for 28 percent of recent home buyers, surpassed in number only by the slightly older Generation X. American Express Publishing and the Harrison Group’s 2013 Survey of Affluence and Wealth in America indicates that the wealthiest 10 percent of Millennials will make up 20 percent of the dollars spent on primary-home purchases during the next three years. Oren Alexander, a 26-year-old real estate broker in Manhattan, says, “My generation—we got burned pretty bad by the stock market, we’re tired of paying rent, and we don’t see any better place to put our money.” Many younger buyers are getting a boost in purchasing power from their parents, many of whom believe that buying their children a home is better than keeping their retirement money in bonds or money-market accounts. Others simply want to pass their money onto their children. In response, more builders are catering to Millennials, with such features as open floor plans, rooms that flow to the outside, floor-to-ceiling windows, and high ceilings along with amenities like gyms, pools, spas, and basketball courts. Meanwhile, brokers are using social media to gear their marketing to this demographic. | Read More