What? Millenials are being shut out of the San Francisco Housing Market??! No kidding…
According to RealtyTrac, San Francisco is the least affordable city for Millenials looking to buy a home. It’s a good thing that they aren’t looking…oh wait, according to last week’s infograph by CAR, 31% of the Gen Y’ers still think that buying a home is a good investment. With Alameda County coming in at the 8th least affordable housing market for Millenials where does this leave them? Increasingly, it may put them at odds with investors who are looking for bargains as well as pushing them further out into the suburbs.
Meanwhile, As I snooped around the Pacific Union Blog, it seems that the San Jose Mercury News reported that the sales volume for $1M+ homes is at an all time high. Over 5,700 homes have sold for over $1M in the second quarter alone…more good news for Millenials.
The National Association of Realtors recently released a study showing that Millenials are increasingly out of the housing market nationwide (not just the SF Bay Area), and have the lowest rate of home ownership in almost 2 decades. This isn’t exactly bad news, however. According to the study’s summary:
The strange pattern of more homeowners but a falling homeownership rate…will continue for the next 2 years…because household formation of young adults who had been living with their parents will seek out their own housing with an improving economy, first as renters before the shift to homeowners.
So then perhaps not all doom and gloom for the millenials after all. They’re graduating, living with their parents until they pay down some of their debt, moving out on their own and then making a responsible decision to purchase a home once they can afford it. So perhaps the real reason we’re seeing the lowest rate of homeownership among Millenials in a generation has less to do with homes being unaffordable and more to do with making sure that they’re solvent before purchasing a home. This sounds – to me – that perhaps they are taking some sound financial advice rather than that the sky is falling because they are being prudent. Just a thought.