The current young generation starting to buy their first homes, has found the going tougher than prior generations. You might have thought it’s just ‘you,’ but it’s not.
There are a number of reasons:
- Waiting longer to have children
- A preference to live in high-cost cities
- Higher rents, making saving harder
At the same time, we are seeing more-established residents (Boomers) resisting new development in their areas. They like the way their neighborhood is and don’t want it to change. That change can be ‘more’ housing, different styles of housing, or simply an aversion to change.
Citylab has an article that speaks to this trend: When Millennials Battle Boomers Over Housing.
Lest you think this is just an issue in ‘swanky’ neighborhoods on the left or right coasts, think again. Plymouth, Michigan, has been a primarily bedroom community for decades. Appreciated for its quiet streets, older homes, and having an established downtown, it become an attraction for the very well-to-do. This led to many older homes being torn down, replaced by luxury homes 2, 3, 4x the prior home’s size, on the same lot.
So, in January 2017, the community came together to ban these developments. Even if you can afford it, the existing residents declared enough was enough (see: Size Counts).
Whatever the reason, it is clear the current market supply underserves demand.
Problem is, while there is a demand for housing, it does not necessarily mean there is alignment being the buyers (and what they can afford) and sellers and the price they want for their homes.
Alas, all might not be lost. Housing is cyclical in nature. And, post-recession, it looks like that behavior may be returning. Bloomberg Opinion’s Economics section speaks to this: Housing Market Is Raising Serious Red Flags.
The gist of the article boils down to this: As home prices rocket skyward, affordability falls. As affordability falls, prices will stagnate and then begin to fall as well. Of course, as prices fall far enough, the cycle begins anew, with prices starting to climb again, having become more affordable.
If you’re in the market for a home but cannot find what you want, be patient, your time will come.