A recent article in Houston Agent Magazine headlined “Houston is Heading for a Record-Breaking 2019”, yet for most of our neighborhoods, we are seeing homes lingering on the market. Why does the media always post optimistic articles about the real estate market when prices on homes in established neighborhoods keep dropping and the homes are still not selling?
I had to reach deep beyond “Fake News” and a light when off in my head when my father, who is a Realtor in Montana, commented that he read an article that said “We will have an overabundance of Baby Boomers homes in the near future because these are not the type of homes Millennials are looking for.” So what is it that the Millennial, our biggest home-buying segment for 5 years in a row, is looking for?
According to an article I found in The Post & Courier online, “Millennials are 52% more likely to buy a multi-family property compared to Generation X and Baby Boomers.” This article also indicated that unlike Generation X, Millennials are not opposed to fixer-uppers; however, due to student loan debt, Millennials tend to purchase in the low $200’s.
Where do you find homes in the low $200’s in our neighborhoods beside a multi-family townhome or condominium? The answer is new construction in the suburbs, which is growing at a rate of 30,000 homes per year for the next two years, according to an article in the Houston Chronicle. This same article also revealed that since the most recent oil bust, the U.S. Census Bureau has estimated that we are losing over 19,500 residents a year over the last two years compared to a gain of 60,000 residents a year just prior to the bust.
So there lies the answer! Homes are selling in the lower price range and existing homes continue to compete with new construction. “After the most recent oil bust, the homebuilding market has shifted toward more moderately priced homes, with the majority of construction activity delivering homes in the $200,000 to $400,000 price range,” the Houston Chronicle article cited.
I had to do some digging, but I hope this sheds some light on this market. What does that mean for the homes in our neighborhoods? You either have to lower your price to appeal to the Millennial buyer or fix your home up to appeal to the Generation X buyer.
Writer – Sherry Campbell