NJ Millennials are Skipping ‘Starter Homes’ and Going for These Instead
The term "starter home" may be on the path to extinction, at least here in New Jersey. It seems many young buyers are skipping that first step and going big right out of the gate.
Randi Dickman, broker associate for Re/Max Signature Properties, has been in the real estate business for 17 years and lately she's been noticing a decline in interest for homes that let buyers enter the market and get their feet wet before eventually transitioning into a "forever home."
Instead, that forever home — one with multiple bedrooms and bathrooms, along with a garage, basement and yard — is what many young buyers are searching for on their first trip through the real estate market.
"A lot of them are living at home until they're 25-26 years old, so they have those first years from 20 to 26 to save the money, and that's where they're coming up with these large down payments," Dickman said. "The millennial generation is living home longer, and so that's giving them the opportunity to save their money."
Moving into a larger home, to young couples, means no need to move again later on, even if a couple children are added to the equation.
The millennial generation is a "different beast," according to Dickman, who handles properties in Monmouth, Ocean and Middlesex counties.
They're well-educated on the market thanks to technology, they're less interested in moving into a home that needs a lot of work and their preferred methods of communication are text and email, she noted.
Patrick O'Keefe, director of economic research at CohnReznick in Roseland, also points to changing patterns among generations. Baby Boomers, for the most part, followed an immediate pattern of school-job-home.
"That still is probably the predominant map that most people are following, but it is no longer the only route that particularly-young adults view themselves traveling," O'Keefe said.
A report released last Monday by Apartment List suggests student loan debt is keeping college graduates from owning a home sooner. Graduates without debt can afford a home within 5.3 years, compared to 10.2 years for graduates with debt, the report said.