Why More Millennials Are Buying Homes in the Suburbs

As they get ready to start families, city-loving millennials are making an unexpected choice: They are moving to the suburbs, much as their parents did decades ago.

“That’s where the trend is going,” says Tiffany Alexy, a broker with Lucky Penny Realty Team in Raleigh, North Carolina. “You really tend to get more for your money in the suburbs.”

A new survey by the National Association of Realtors found that the share of millennials, those born between about 1980 and 2000, buying in an urban or central city areas decreased from 21 percent to 17 percent from 2014 to 2015. Like buyers in other age groups, the majority of millennials bought a detached home in the suburbs.

 

“Millennials know they’re getting more value when they buy in the suburbs,” says Victor Quiroz, a millennial agent at Berkshire Hathaway HomeServices California Properties in Covina. For the price of an urban loft apartment, they’re getting a three-bedroom, two-bath house in a safer neighborhood with better schools, he says. “They’re finding a sweet spot where they aren’t too far away.”

Unlike their parents, the millennials are looking for suburbs with urban amenities such as yoga classes, health food stores and walkable downtown areas, close to parks and natural areas. They also don’t want long commutes.

“People want more urban perks,” says Alison Bernstein, founder and CEO of Suburban Jungle, which helps families in New York, Los Angeles, San Francisco, Chicago and Miamifind the right suburb for them. “They don’t want to be isolated. They don’t want to feel alone. They want to be part of a community. … They really want walkability. They love great downtowns.”

In the New York City area, where Bernstein lives, for example, there are 500 towns in commuting distance of Manhattan, and those towns aren’t all alike. Finding the right fit is crucial, she says. You don’t want to be the only family looking for a day care center in a town where everyone else has a live-in nanny, she says, or the only writer in a place where everyone else works on Wall Street. The right town is usually more important than the right house.

“The real focus should be on the personality of your town,” Bernstein says. “I think the trouble happens when you just focus on the house.”

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She advises couples to make sure both want the same features before they start looking and to find out which suburbs provide that lifestyle. “Our feeling is you can’t make an intelligent decision until you’ve gone through a process and understand your options,” she says.

 

One thing the millennials find more important than their parents did is walkability. “We like to walk around,” Quiroz says. “They’re willing to give up a couple of things so they can be closer to those shops and restaurants.”

They also want bike paths, parks and natural areas close by. “People are on this huge health kick,” Bernstein says.

Whether they want huge yards may depend on the area. In Los Angeles, Quiroz says his clients are less interested in a large yard. Alexy says her clients in Raleigh find outdoor space important and want a yard big enough for kids to play and dogs to romp. “Green space is a big trend I’ve been seeing lately,” she says.

While lower prices are one factor driving younger people to suburbs, her clients don’t seem to believe they’re making a major compromise. “I get the feeling they’re going for what they want,” Alexy says. “I don’t see it as something they’re fighting in any way.”

Here are six reasons millennials are moving to the suburbs:

They get a better deal. Many millennials are buying their first home, and they are finding a better deal in the suburbs than in the urban core. “They are looking for value,” Quiroz says. “That’s the biggest thing. They’re very cautious and almost penny-pinching and very wise about how they spend.” More here

 

 

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How to Successfully Buy a Home in a Tight Seller’s Market

If you’ve decided to buy a home this spring, good luck to you. Your challenge will be not just finding a home you like, but also beating out all the other homebuyers who like it and want to make an offer on it, too.

The number of homes for sale is low nationwide, particularly in the price ranges desired by first-time homebuyers. The latest figures from the National Association of Realtors show that that there was only a 4.4-month supply of homes for sale in February, which is lower than the six-month supply that indicates a balanced market. One-quarter of February’s transactions were all-cash sales, according to the NAR, and investors bought 18 percent of the homes that were sold.

“A well-priced home in good condition will usually move very quickly and often have multiple offers,” says Mary Ann Hebert, broker and partner at Better Homes and Gardens Real Estate Bannon & Hebert in Middlebury, Connecticut.

That means that if you want to end up with a nice home, you need to be strategic. Expecting to find the home of your dreams by nonchalantly walking into a few open houses or perusing some online listings is not realistic in this seller’s market.

[Read: Here Are the 20 Best Places to Live in the U.S. ]

“In Raleigh, it’s insane,” says Tiffany Alexy, broker with Lucky Penny Realty in North Carolina. She advises finding a good real estate agent who knows when and how to negotiate. While everything is negotiable in real estate, sellers are often less inclined to deal if they have other offers waiting in the wings. Plus, if you’re a buyer,working with an agent usually costs you nothing because the seller pays the full commission.

These days, most would-be buyers come to an agent with a list of homes they’d like to see based on their online research. While that often serves as a solid starting point, a quality agent may find additional options. After buyers have seen a few properties, Hebert says skilled agents can typically gauge what they’re looking for in a new home and may have other properties lined up. “I advise them to listen to their Realtor,” she adds.

Victor Quiroz, a millennial agent who just taught a workshop called “How to Write a Winning Offer” to agents in California, advises those agents to go old-school and talk to the listing agent on the telephone because that will yield a lot more information about what the seller really wants. If you’re the client, suggest to your agent that he or she make that phone call and report back to you.

“Call. Don’t text, don’t email,” says Quiroz, from Berkshire Hathaway HomeServices California Properties in Covina. “You’ll get a lot more from a phone call than from a text message or email. … Don’t just send them a text. That’s not going to work.”

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Knowing what’s most important to the sellers can be key to creating a winning offer. “It’s all negotiable,” Alexy says. “If you have a good agent, they’ll find out the motivations of the seller.”

[See: The Best Apps for House Hunting .]

Here are nine tips to help you get the house you want this spring.

Get your finances in order first. Several months before you intend to start looking, you should get copies of your credit reports to make sure you’re in a financial position to buy. Shop for mortgage financing before you start looking at houses. “I will not take anybody to see any house unless they have a preapproval letter or proof of funds,” Quiroz says. “I want proof of funds to show the seller.” Alexy says that some lenders are doing the underwriting before the house is under contract, which shortens the closing time and can be more attractive to the seller.

Move quickly once you find the house you want. That often means rushing out to see new homes within hours of them being listed and writing up an offer immediately if you like the house. “Things are gone in a matter of hours,” Alexy says. “You really have to move fast.”

Don’t make snap judgments based on listing photos. A house that doesn’t lookappealing in photos could still be a great house. Homes being sold by an estate or homes with tenants inside often yield particularly poor photos. Plus, photos fail to convey the feeling of a home or the floor plan. “Unfortunately, the pictures don’t tell a true story,” Hebert says. “You have to be willing to look past some of the pictures.”

Mortgage Rates Steady at 6-Week Lows

Mortgage rates stayed steady today, beginning the first full week of April right in line with the lowest levels in roughly 6 weeks, depending on the lender.  Most are offering conventional 30yr fixed quotes at 3.625% on top tier scenarios, with a few lenders an eighth of a percent higher or lower.

There were no significant economic events today and very little movement in the bond markets that underly mortgage rates.  In fact, the level of volatility has been steadily decreasing since last week’s speech from Fed Chair Yellen (which kicked off the most recent run of good luck for rates).  This can occasionally be the prelude to a bounce, but it’s more often a consolidation before continuing in the same direction.  To say nothing of probabilities, there is simply some breathing room for rates to move higher without ending the broader downtrend that’s been in place since mid-March.
Loan Originator Perspective

“It appears that floating over the weekend has paid off with slightly better rate sheets.   Hopefully this is the beginning of a new trend pointing toward lower rates.   With 1.80 holding on the 10 year note, I see very little risk to floating.” -Victor Burek, Churchill Mortgage

“After the weekend allowing secondary markets to digest what went on last week and Friday’s NFP rates look pretty good today. And today’s sideways action is a decent sign, in my opinion. Where do we go from here? If you’re closing in the next few weeks rates are near the 2016 best levels, so locking makes sense. If closing in a longer time frame, maybe see what happens with an eye on the market and a conversation with your loan officer.” –Jeff Anderson, Loan Officer, Salem Five Mortgage, LLC

“After a week of solid price gains it certainly makes some sense to lock in and protect those gains right now and especially if your loan is closing within 30 days or less.  Sentiment seems to be drifting towards the lower inflation outlook which may certainly keep rates subdued so floating longer term closing times is certainly not too risky at this point.  Keep glued in to the markets and your loan officer, however, as things can change quickly.” –Hugh W. Page, Mortgage Banker, Seacoast Bank

Today’s Best-Execution Rates

  • 30YR FIXED – 3.625
  • FHA/VA – 3.25-3.5%
  • 15 YEAR FIXED – 3.00
  • 5 YEAR ARMS –  2.75 – 3.25% depending on the lender

More here.