Luxury Home Buyers Aren’t Always Trading Up
Millennials are Saving For That First Home Purchase
It used to be common that buyers of $1 million plus luxury homes were on their 2nd or 3rd home purchase. We (real estate professionals) still see luxury home buyers with existing homes to sell and plan to use the equity for the new luxury home purchase. Needs or wants for luxury homes are very diverse. Some may need more space while someone else is looking for privacy on a large lot or a place for entertaining. One of the latest type of luxury home buyers are Millennials and they are purchasing for the first time.
When I first read the Washington Post article and saw the headline “High-income millennials use their buying power on luxury homes” I thought no way. Since it seems that I was just reading how Millennials were living with their parents it seemed not true. Then I read the article and that didn’t change my mind. My thoughts about this matter changed when I reflected on the housing market currently and what I have been witnessing. There is validity in the article and first time buyers are saving and buying their first home later in life when compared to the baby boomers.
I came up with a list of reasons this is becoming a trend
- Prices of homes have risen and a $1 million is not the same as 25 years ago
- Lifestyle is very important to Millennials and living near public transportation (such as the Metro) is popular and expensive
- Living in or near a major city
- The ability to walk to restaurants and shops
- The ability to wait and get what and knowing what you are willing to pay for
- Buying your first home because the rent is not much less than a house payment
- Observing what their parents have done and coming to the realization that owning a home is a good thing
- Interest rates have been extremely low and since the rates are now starting to slowly rise, buying while rates are still low
- 25 Years ago a median price of a home in the U.S. was $97,300
- Everything is relative and $1 million does not buy a lot in Metropolitan Areas, and based on Zillow the average priced home in Falls Church Virginia is $1,116, 513.
So as it seems to me the tried and true saying about real estate is LOCATION LOCATION LOCATION. My hats off to the Millennia’s buying any type of home. I think a huge take away is that these youngsters are not much different than the baby boomers, they will work for what they want. In a world of instant gratification the Millennial may well be the generation that is patient? At the very least they won’t settle and that might be as years past, houses becoming homes, pride of homeownership is the best result and financial gain is a product of the above.
In Northern Virginia the the areas that are poplar locations would be those with a lot happening and places to get to and a few that come to mind are Arlington, Mosaic at Merrifield, Falls Church, Alexandria and Tyson’s Corner.
Anyone on our team would be privileged to be a consultant to you in purchasing or selling a home.
Check out what $1 Mill will you get you in Fairfax County Virginia