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Boston real estate for sale: Next wave Gen Zers

They are the Gen Z places to be.

More and more young, first-time homebuyers are eschewing expensive coastal cities for landlocked towns in Utah, Kentucky and Oklahoma, a report by LendingTree reveals.

The New York Times is reporting members of Generation Z — those born between 1997 and 2012 — are gobbling up homes in mid-sized cities such as Louisville, Kentucky, Salt Lake City, Utah and Oklahoma City, Oklahoma, where between 15.3 and 16.6 percent of mortgage offers are going to that age group.

Meanwhile, coastal cities such as New York, San Jose and San Francisco have had between 3.6 and 4.5 percent of new mortgages going to Gen Zers

Salt Lake City, which has finance, medical and tech industries drawing young professionals, topped the list for the second year in a row, according to Jacob Channel, the senior economic analyst for LendingTree.

Louisville climbed into the No. 2 spot from seventh place the previous year, outpacing Oklahoma City, which dropped one spot into third place.

The median asking price of a home in Salt Lake City on the market between March 2022 and April 2022 was the most between the three cites at $699,000, according to RocketHomes.com. In Louisville, houses go for much less, with a median price of just $224,980. And Oklahoma city homes have a median listing price of $254,625.

San Jose, by comparison, had a median list price of $1,283,317, while San Francisco’s was $1,290,629. Only New York, at $671,666, had a median asking price of less than any of the mid-sized cities Gen Zers are preferring.

Channel added that the introduction of remote work for Gen Zers has increased interest in smaller cities, but pointed out in the report that rising interest rates were making home purchases more difficult in 2022 than they had been in previous years.

Source: [New York Times] — Vince DiMiceli

Boston Condos for Sale

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Boston real estate for sale: Next wave Gen Zers

Century 21 CEO Mike Miedler explains how the inventory in the housing market will need to grow substantially to accommodate the growing demand from younger generations.

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Boston Condos for Sale

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Boston real estate for sale: Next wave Gen Zers

Boston real estate for sale: Next wave Gen Zers. Gen Zers are the next generation of Boston condo for sale buyers, and they’re eager to jump in and buy their first homes. Whether you are part of this generation or any other, it’s never too early to start saving, so you can reach your Back Bay condo ownership goals sooner rather than later.

Who are Gen Zers

You’ve likely heard about Millennials, but what about Gen Z? In the next 5 years, this generation will be between the ages of 23 and 28, and they’re eager to become Boston real estate buyers faster than you may think.

According to realtor.com, “Nearly 80 percent of Generation Z members say they want to own a home before age 30,” and Concentrix Analytics said, “52% of prospective Gen Z buyers are already saving to buy a home.”

Wikipedia defines Generation Z (Gen Z) as “the demographic cohort after the Millennials. Demographers and researchers typically use the mid-1990s to mid-2000s as starting birth years.”

Reasons for buying Boston real estate

The report from Concentrix goes a little deeper on Gen Z, identifying the main reasons this cohort wants to own Boston real estate:

  • 55% want to own a home because they want to start a family
  • 47% want to build wealth over time
  • 33% want to make their family proud

Boston real estate challenges

Although they’re eager to buy, this generation also perceives a few challenges ahead:

  • 66% believe saving for a down payment and closing costs will be challenging
  • 58% feel covering the monthly costs of owning may be difficult
  • 52% perceive a lack of knowledge about where to start

It is also interesting to note that 21% of Gen Zers think their parents will provide financial help, 17% will use a down payment assistance program, and 15% believe other family members will help them. One of the highlights of the report mentioned,

“More than half of Gen Zers who think they’ll receive help also think they will need to pay their parents back, compared to 40 percent of millennials.”

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Millennials were once referred to as the “renter generation” because of their preference for apartment living in urban areas over purchasing a home in the suburbs like their Baby Boomer parents.

That myth was busted, though, as the generation entered its 30s and began to follow a similar path of starting a family and buying a home. But what does it mean for the generation behind them?

Preference for the suburbs

A new survey by Realtor.com suggests that Gen Z is likely to head in the same direction, with 72% of them saying they want to eventually buy a home — and they’re hoping to do it soon.

“The data shine a spotlight on a cohort still working its way through college or on the early path of its professional trajectory,” the report noted. “Interestingly, however, Gen Z values homeownership, and a majority states that it would prefer to buy instead of rent their homes in the long term.”

The survey, which included those aged 18 to 24, shows that the typical member of Generation Z is single (82%) and about half (45%) are employed — split evenly between full- and part-time employment.

Gen Z is noted in the report as having a stronger preference for the suburbs than its millennial counterparts. While millennials flocked to high-density urban areas in the 2010s, only a little more than a third (35%) of Gen Z lives in the big city.

This seems to support a survey released in March by the National Association of Realtors that showed that the youngest members of the millennial cohort have less interest in living in downtown centers and more interest in living close to family and work.

“The younger millennials overwhelmingly answered that they prefer to live closer to work, as many don’t want a long commute, and this was evident in their buying habits,” Jessica Lautz, NAR’s vice president of demographics and behavioral insights, said in the NAR report. “Additionally, both of these groups also placed a high value on being close to family and friends as 57% said that dynamic factored into what neighborhood they ultimately chose.”

In the Realtor.com survey, just over half of Gen Z adults live in suburbs (51%), and about the same percentage say that’s where they plan to buy a home (49%). That’s compared to 35% of those who live in high-density areas and 32% who want to purchase property there.

Impacts of the pandemic

The pandemic had a profound effect on those in Gen Z, sending about a quarter of them back to live with parents or another family member, but there could be a silver lining. Realtor.com reported in January that Gen Z is using some of the money saved on rent for a future down payment on a home. In Chicago, the median monthly rent of $1,533 is more than enough to cover the 5% down payment of $17,000 for the median home price of $340,000.

In the Gen Z survey, Realtor.com found that 17% of respondents who moved home said they plan to use the money saved to buy a home.

“Given the early stage of life for the Gen Z cohort, as well as their experience with the real estate cycle of the past decade, it is interesting to see that a majority of Gen Z adults want to buy a house in the future,” Realtor.com noted in a report on the survey.

“The preference for homeownership at younger ages bodes well for real estate markets, as we consider demand over the decade ahead of us.”

More than a quarter of those surveyed (26%) said their interest in buying increased after the pandemic, but the biggest motivating factor (50%) for homeownership was the desire to have children.

The oldest members of Gen Z are turning 24 this year and will likely relocate in pursuit of professional and personal goals, the survey noted. Roughly 71% are expected to move sometime within the next five years. “Like millennials before them, who shifted their housing preferences as they approached their 30s, over four-in-10 Gen Zers indicated that they expect to buy a house within five years. An additional 44%, likely representing those still enrolled in higher education institutions, think they will be able to buy a home in 5-10 years,” the report said.

Bottom Line

It is never too early to start saving for your own Beacon Hill condo, whether you are part of Gen Z or a different generation. If you would like to know where to start and how much you need to save to reach your goal of buying a Midtown condo, let’s get together so you can better understand the process.

Boston Real Estate FAQ

Who are Generations Zers?

Wikipedia defines Generation Z (Gen Z) as “the demographic cohort after the Millennials. Demographers and researchers typically use the mid-1990s to mid-2000s as starting birth years.”

Do Generation Z want to buy or rent their homes?

A majority of Gen Z adults want to buy a house in the future,” Realtor.com noted in a report on the survey.

Are Generation Z planning on relocating?

According to Relator.com Roughly 71% are expected to move sometime within the next five years.

Where do Generation Zers want to live?

In the Realtor.com survey, just over half of Gen Z adults live in suburbs (51%), and about the same percentage say that’s where they plan to buy a home (49%). That’s compared to 35% of those who live in high-density areas and 32% who want to purchase property there.

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