YOLO: Tattoos and mortgages
- June 30, 2019
Despite all the Googling, number-crunching and HGTV watching, Ingrid Medrano still wasn’t ready for just how unpleasant the backyard poison ivy would be at the home she bought in Richmond about two years ago.
“Oh, god, it was bad,” says the 30-year-old nonprofit worker. “The Realtor, to his credit, he did tell us about it. They were like, ‘There is poison ivy out here.’ And we were like, ‘meh.’”
Medrano, an immigrant from El Salvador, says she and her fiance felt pressured by their real estate agent to jump on buying their home or risk losing it to another buyer.
Heated competition in real estate markets across Virginia has fueled real estate FOMO among Virginia’s millennials, according to real estate agents who say it hasn’t been uncommon over the last year to see bidding wars break out between 20-something and 30-something homebuyers over starter homes.
As with other metro areas, Roanoke has a scarcity of available starter homes, leading to a sellers’ market with homes fetching multiple offers within a few days.
Brad Thomas, a Roanoke Realtor with Mountain View Real Estate, recently took some millennial buyers to a house that had hit the market that morning. By noon, the sellers had three offers.
About a third of 2017 home sales in the commonwealth went to millennials, according to an analysis by Virginia Realtors Chief Economist Lisa Sturtevant. Nationally, millennials accounted for 37% of all homebuyers from June 2017 to June 2018 — making them the most active generation of homebuyers for the sixth year in a row, according to the National Association of Realtors' 2019 Home Buyer and Seller Generational Trends study.
As wage growth is increasing and older millennials are reaching their late 30s, more want to own homes.
“We talk a lot about the millennials wanting to be footloose and wanting to be not tied down,” Sturtevant says, “ [but] this demographic cohort is moving into an older age group and, as interest rates are still favorable, it suggests that 2019 should see an increase in [millennials] buying homes.”
All the homebuying is leaving many millennials shaking their heads, however. About 80% of homeowners ages 18 to 34 have at least one regret about their home, compared to 65% of baby boomers, according to a recent Zillow housing survey.
For her part, Medrano wishes she had bought a house that had a half-bath and guest room. “We didn’t really know what we needed until afterwards,” she says.
Homes sold in the Central Virginia/Richmond housing market spent an average of 32 days on the market in May, about the same as a year ago, according to a Long & Foster Real Estate report. Nationally, homes last year stayed on the market for an average of about 60 days.
“I’m definitely seeing and talking to other agents in my office about them getting into bidding wars,” says Richard Sena, a Richmond real estate agent with Small & Associates Inc.
In addition to making higher offers, buyers are having to seek other ways to make their bids more attractive to sellers. Not many millennials can do cash offers but they are recommended if possible, Sena says. Buyers are also offering shorter closings, paying for home inspections or repair fees, and are adding clauses so their offers automatically rise in response to competing bids.
But Sena counsels his buyers to accept that they may be out-bid and should stick to a price ceiling, telling them, “What is that number for this house that you can say, ‘You know what? I'm glad the [other] guy got it.’”
For a more in-depth version of this story, please see the August issue of Virginia Business.