Currently, there are approximately 45 million millennials between the ages of 26 and 35. Millennials make up the largest share of first-time homebuyers, which means they are defining the trends of today’s housing market. The number of millennials that are part of the housing market has increased from 37% to 43% of all current homebuyers. While millennials may be defining the housing market trends they are still subject to the chaotic swings of the current housing market.
Millennials are entering the real estate market at a time of historically low housing supply.
In addition, home prices have been on the rise, reaching record highs over the past year with double-digit price increases. With such tight supply and higher than normal housing prices, millennials and other generations just now entering the housing market could feel discouraged by the ultra-competitive real estate process. But this does not need to be the case.
Find a Trusted Real Estate Agent
There are real estate apps, real estate websites, and mortgage providers that can get you approved for a loan in less than 15 minutes. But all that technology won’t replace a real estate agent. Real estate agents understand the housing market, the trends in housing prices, and the best ways to compete for and win the house of your dreams.
Choosing a real estate agent can take time. The best way to begin a search for a real estate agent is to ask trusted family and friends for recommendations. Truly great real estate agents will leave an impression on home buyers and sellers who will be more than happy to recommend their real estate agent to you. After you get a few names, take to the internet and do a bit of additional research.
A top agent will have a website with their current listings, testimonials from previous clients, and a listing of their specialties. From there you can set up an interview and get a better feel for the agent’s process and overall real estate knowledge.
Keep Your Search Area Large
Inventory is tight which means while you may have your heart set on living on a particular street or in a specific neighborhood, there is no guarantee a house will be available anytime soon.
Expanding your home search will give you more potential home options and a better chance of finding a home that is in your price range.
If you are serious about home buying, you should have your financial ducks in a row long before you begin viewing homes. In such a competitive housing market bidding wars can begin quickly leaving you rushed to secure financing. During a tight bidding war, buyers with cash or those that have completed the underwritten pre-approval process are more likely to secure a future home.
The mortgage process can be long and tedious, taking anywhere from a few days to several weeks to complete underwritten pre-approval. For this reason, cash will always be the preferred transaction method and has become even more popular in the current market. However, younger buyers do not have previous home equity or large savings to fall back on.
There are companies such as HomeLight Cash Offer which can help you act as a cash buyer and increase your chances of securing a home.
A seller’s market means that buyers need to be creative if they want to win bidding wars. Homebuyers over the past year have had success with a few creative tactics that win over sellers. You may limit or forgo contingencies, which are conditions that you, the buyer, can put into your offer to protect yourself in case something goes wrong during the buying process so that you can cancel and not lose your money.
You can also offer appraisal gap coverage. By doing this you will guarantee that you will pay the difference between the appraisal and the final sales price should it be higher than the appraised value. Finally, some buyers have gotten even more creative to win bidding wars by offering rent back or giving the seller access to a part of the home after purchase.
Millennials who are currently in the market to purchase a home may have limited options and will be faced with many other competitive buyers. But hiring a trusted real estate agent, and preparing your finances will give you a much better chance of finding and purchasing a home. If you are patient and a bit creative you are sure to find a home you will love.