Boston condo buyers 2022: The millennial’s
Millennial demand driving up prices in family-friendly neighborhoods
Millennial demand is driving up condominium prices in family-friendly neighborhoods, including right here in Massachusetts.
With a record number of millennials reaching the age for new parents to buy their first home, that demand is sparking serious competition in areas already hampered by historically low housing inventory and could accelerate prices even higher, according to a new Zillow report.
The report found, across the country, 10% of zip codes with the largest share of children had an average home value growth of 21.3% from October 2020 to October 2021.
In the Bay State, the town of Medfield had the highest share of children at 29% with home values growing 15.3% in 2021. The West Fens/Kenmore Square area of Boston had the smallest share at 2.4%. Across Massachusetts, home values grew 14.3% last year. By the end of 2021, there were 25.7% fewer homes were on the market than at the end of 2020.
“As millennials go, so goes the housing market, and we are seeing now, as millennials age, that they are looking for homes that fit the needs of growing families,” said Zillow economist Nicole Bachaud. “Millennial demand has helped push up home prices in areas with the most children. Competition for homes in these family-friendly areas should intensify in the coming years as more millennials reach the key age of 32, adding to the affordability squeeze.”
Zillow said millennials reaching peak age to buy their first home, grew during the past nine years and is “about to turn into an avalanche.” According to the report, 200,000 more Americans will turn 32 in 2022 compared to 2021, the biggest jump since 2013.
Millennials are, without a doubt, the next big thing to happen to the 2019 Boston condo housing market. Though they make up only 14% of the U.S. population, millennials account forBoston, their impact is magnified.
National news sources and real estate organizations alike are calling downtown Boston one of the hottest real estate markets in the country for millennials. That’s good news for sellers, who’re happy to have additional buyers in the pool, and for developers – if they’d ever start building affordable Boston midtown condos for sale.
What, exactly, is a millennial home buyer in Boston looking for in what will likely be their first house?
Obviously, millennial Boston condo buyers are coming to the table with less cash than their retired counterparts but today’s millennials have unfortunately saved less for a down payment than any other generation in history. That means they’ll be relying on unusual mortgage packages and properties eligible for FHA financing. For private sellers, enticing millennial buyers with options like seller-financing, rent-to-own, and paid closing costs is a worthwhile investment.
Yes, millennials have a reputation for loving their USB charging outlets and cutting-edge quartz countertops but did you know that statistically, they’re more likely than any other generation to buy an older, previously lived-in home? The biggest factor is affordability. Millennials tend to be on one end of the spectrum or the other: they want lots of space and yard in their first home (they plan to live in it for decades) or they want something small and centrally-located. The ones looking at older homes don’t mind doing renovations but as time turns, millennial renters looking to buy out of Boston Midtown high-end condo style living may be less apt to make aesthetic compromises.
As we mentioned, millennials in nearly every market say walkability is a huge concern. In Boston, public transportation like the T and the city buses are helping connect far-flung neighborhoods, and public works like bike paths/lanes allow for painless commuting for the eco- and calorie-conscious. But millennials in Beacon Hill want to live, work, and play in an urban setting; they want to be able to walk to shopping, dining, and retail from their homes if possible. That’s why areas like Boston Midtown and downtown Boston are currently such hot rental markets. Sellers who previously may have had trouble unloading a too-close-to-the-road or awakened-by-nightlife property may be in luck with millennial buyers.
Of course, millennial home buyers in Boston want the same things any other cohort of millennials want, too. They love high-tech home features, responsive design, and open floorplans well-suited for entertaining. They like light, great design, and space that can be used to work from home, house a guest, or serve as a playroom.
Call us today to find out why you should be working with a buyer’s agent…for free.