Sullivan Team

Why Millennials Are Not Creating More Households and Buying Homes - 2 Views

Below is an article from Rise Media explaining that Millennials are not buying homes because of their lifestyle choices.

Forbes has a different read on the problem explaining that Millennials' life style choices are driven by low paying jobs  - see Forbes Article below.
 
Fact: 44% of college graduates in their 20s have low paying jobs and there is resistance to hire recent grads because:
1. Baby Boomers are delaying retirement and 2. Technology has replaced many lower paying jobs and this trend will continue
 
Today is a perfect time for Millennials to explore a career in Real Estate Sales, a  satisfying and rewarding profession for the right person.
 
Terry  
 

Lifestyle Choices—Not Student Debt—Keeping Homeownership at Bay for Millennials

The homeownership rate is falling — from a high of 69 percent in the mid-2000s to less than 64 percent today — and lack of millennial demand is a major factor. Some even see a lower homeownership rate as “the new normal,” as an Urban Institute study declared.

This trend appears worrying, especially with homeownership still strongly linked to the American Dream. But to fully assess the effects it’s having on society, we must actually answer the question of why millennials aren’t buying.

My research has led me to an unconventional, yet surprisingly obvious, answer. Lack of finances is not the primary reason millennials are shunning homeownership — in fact, it’s not a significant problem at all. The real reason they’re delaying or avoiding homeownership is their lifestyle choices, especially in the realm of marriage and children.

For full article go to: http://rismedia.com/?p=99036

 

Alternate View: The 5.4% Unemployment Rate Means Nothing For Millennials

The national unemployment rate has dropped to 5.4%, the lowest rate since 2008, but this low percentage means nothing for Millennials (born 1980-2000).

The data is actually pretty scary44% of college grads in their 20s are stuck in low-wage, dead-end jobs, the highest rate in decades, and the number of young people making less than $25,000 has also spiked to the highest level since the 1990s.

There are various factors contributing to the absence of jobs for Millennials.

First of all, employers are more hesitant to hire new graduates, as Baby Boomers are delaying retirement and holding onto their jobs due to financial insecurity. This creates stagnancy in the workplace.

Moreover, advances in technology are making many jobs obsolete because they can easily and cheaply be automated. In fact, renowned futurist Faith Popcorn argues that the “robot revolution” is coming, projecting that roughly one out of three U.S. workers will be replaced by robots by 2025.

We’re adapting to the changing job market. We’re not buying cars at the rates that previous generations have, instead opting to use public transportation or car-sharing services. Buying our first homes is no longer a part of the “American Dream,” as most of us aren’t even buying homes at all. 

For full article go to: http://onforb.es/1GZXI6r 

 

Mortgage Rates Hit 2015 High - 4.2% for 30 Year Fixed

Mortgage Rates Up - 30 Year at 4.2%

Mortgage Rates at 2015 High

Mortgage Rates jump to 2015 high, 4.13% for 30 year fixed

 

MA April 2015 Unemployment Rate Drops to 4.7%

MA Unemployment Rate continues to drop..  April's rate was 4.7% which is 1.1% below a year ago.  

Net jobs increased 10,100 in April and increased 66,100 jobs over the past year.

 

http://lmi2.detma.org/lmi/lmi_graph.asp

 http://lmi2.detma.org/lmi/News_release_local.asp

 

MA Unemployment Rate Drops to 4.8%, Labor Participation Rate Rises to 66.2%

Good News For MA Real Estate Market.  Employment Continues To Rise!

MA March Unemployment Rate Dropped to 4.8% & Labor Participation Rate Rose to 66.2%, highest since June 2010.  

Ma outperforms the nation.  The USA March Unemployment Rate was 5.5% and the Labor Participation Rate fell to 62.7%.

BOSTON, MA -April 16, 2015 ---  Today the Executive Office of Labor and Workforce Development (EOLWD) released preliminary March 2015 estimates that show the Massachusetts total unemployment rate dropped to 4.8 percent, a 0.1 of a percentage point decrease from the February rate. Over the year, the unemployment rate fell by 1.1 percent from 5.9 percent in March 2014.

The share of working age residents employed or unemployed, also known as the labor participation rate, was 66.2, an increase of 0.3 of a percentage point since February. The March rate is the highest participation rate since June 2010. Compared with March 2014, the labor participation rate increased a full percentage point over the year.

March 2015 estimates show that 3,448,800 residents were employed and 175,200 were unemployed. Compared with March 2014, there were 34,000 fewer unemployed persons over the year.

http://goo.gl/icXO8Z

 

Vacation Homes Sales At Record Levels

Vacation Home Sales Up 57% in 2014 to Record 1.13 Million Sales

 

Cottages on Nantucket Island, a market where prices rose strongly last year.

Cottages on Nantucket Island. Photo: GETTY IMAGES

Vacation home sales shot up 57% in 2014 from a year prior, the largest increase since the National Association of Realtors began tracking the data in 2003.

 
Is the price reasonable?

Nearly 1.13 million vacation homes were purchased last year, surpassing the peak of 1.07 million in 2006, during the housing boom, according to the Realtors’ association. Vacation properties, defined as recreational property purchased primarily for use by the buyers or their families, accounted for 21% of all home sales last year, the largest share since the group began tracking the data. 

The median price for vacation homes fell 11% nationwide last year, which the association says was largely due to a greater volume of transactions involving smaller and lower-cost units, including condominiums and previously foreclosed-upon homes.

But in some popular destinations, prices were up significantly. In Napa County, Calif., the median sales price for vacation homes rose 16.7% in 2014 from a year prior, according to Redfin, a national brokerage based in Seattle.

Increases at the high end of the market have been steep, in some cases. On the island of Nantucket, Mass., 195 homes changed hands in 2014 and the median price increased by 15%, to $1.2 million, according to the Warren Group, a real-estate data firm based in Boston. There were 161 sales in 2013. The vast majority of sales there are vacation homes, says Warren Group Chief Executive Timothy Warren.

 

For Full Article - http://goo.gl/tiYZF3

By AnnaMaria Andrioti, April 3, 2015 10:32 a.m. ET

US Home Sales UP 10.4% From Last Year, Up 6.1% From Last Month

Existing Home Sales Up 10.4%. Northeast Sales Were Sluggish, But Our Local Market is HOT!!!

Contact us for your local market report - Homes@SullivanTeam.com 

http://goo.gl/2d8BdN

Real Estate Remains The Top Long Term Investment

Survey Says: Real Estate is The Best Long-Term Investment

 

Apparently all is forgiven and forgotten and Americans are again embracing real estate as more than just shelter.  For the second year in a row a Gallup telephone survey conducted in April found Americans think it is the best kind of long-term investment.

Investing in real estate outstripped stocks, gold, traditional savings instruments and bonds with 31 percent of survey respondents preferring it.  Stocks and mutual funds were second at 25 percent. "A return of Americans' confidence in real estate and stocks as solid long-term investments was first evident a year ago, paralleling real world improvements in these areas," Gallup said. "Their continued strength this year indicates that was no fluke."

Real estate took a pounding in home values and consumer confidence during the subprime mortgage collapse and the subsequent housing crisis and recession.  Gold gained appeal during this time, likely due to its tangible quality, but this has proved to be temporary. 

Gold dropped to third this year as a choice for maintaining or growing wealth, declining by 5 percentage points to around an 18 percent preference.  This was a significant change, Gallup said, from 2011 and 2012 when it was the runaway leader.  Preference for gold has lost about 15 percentage points in the survey results since 2011.

Savings accounts and certificates of deposit (CDs) and bonds consistently have been lower on the list, although those identifying savings accounts as the best investment reached 19% in 2012 -- comparable to stocks and real estate at the time -- possibly reflecting Americans' greater desire for stability and security in the first few years after the 2008-2009 financial crisis. This figure has since stabilized near 15%. The percentage choosing bonds has only decreased since Gallup's baseline measure in 2011.

The two top choices in the survey were relatively unchanged from the previous year after three years in which real estate and stocks increased in popularity while gold waned.  While this trend originates in 2011, an earlier version of the Gallup question that did not include gold shows significant shifts in preference for real estate and stocks between July 2002 and April 2007.  During that period preference for real estate fell from 50 percent amid the housing boom to 37% when values began to drop.  During the same period stocks increased from 18 to 31 percent.  Then both dropped 2008 and 2009 as the housing and equity markets suffered severe losses. 

Read More »

What's Trending Now In Real Estate

 

What's Trending Now in Real Estate

The spring selling season is in full swing. Here's a breakdown of what you and your clients need to know about the state of the housing market.

Home prices are surging

Price growth is only increasing, due to a lack of inventory in some markets. According to Lawrence Yun, NAR chief economist "Insufficient supply appears to be hampering prospective buyers in several areas of the country and is hiking prices to near unsuitable levels." Buyers in many areas need to be prepared for an increased amount of competition due to low housing inventory this spring.

Mortgage rates hold steady

30-year fixed rate mortgages remain at 3.7 percent, but that is likely to change. "Low mortgage rates are a welcome sign for those in the market to buy a home this spring season and will help to support homebuyer affordability," says Len Kiefer, deputy chief economist at Freddie Mac. 

Sellers are needed

It continues to be a seller's market, as total housing inventory at the end of February increased just 1.6 percent to 1.89 million existing homes available for sale. For the second month in a row, unsold inventory is at a 4.6-month supply, below what is considered normal for a healthy market.

Buyers want move-in-ready properties

Despite the low housing inventory, buyers are picky about the condition of properties for sale and expect homes to be move-in-ready. "Buyers don’t want to assume any risk with properties that need work, particularly first-time buyers with limited cash resources," says Budge Huskey, chief executive officer at Coldwell Banker Real Estate.

Foreclosures keep slipping

After peaking in 2006, foreclosures are returning to significantly low levels across the country. "Given that August 2006 was the peak of the housing bubble, this eight-and-a-half year low in foreclosure activity is a significant milestone and a sign that nationwide foreclosure activity is on track to return to historic norms this year," says Daren Blomquist, vice president at RealtyTrac.


Investor slowdown

Competition between regular buyers and investors is decreasing. Home prices are getting so high that the share of home sales to investor clients recently reached a four year low.

Buying: it's cheaper than renting

A recent study from NAR found that rents are on the rise in many parts of the country. "In the past five years, a typical rent rose 15 percent while the income of renters grew by only 11 percent," says Yun. A recent study also showed that renters are spending around 30 percent of their wages on rent, compared to homebuyers who spend below 15 percent of their wages on mortgage payments.

A focus on first-time buyers

New programs from Fannie Mae and Freddie Mac seek to make it easier for first-time borrowers to buy a home. They recently introduced 3 percent down payment mortgages-- the first time down payments have been this low on Freddie Mac loans in nearly five years. Besides this, Freddie Mac launched the "Our Home Possible Advantage Program", which is aimed at supporting first-time buyers by allowing no minimum from borrowers in contributions, which means that parents or relatives now can cover 100 percent of the down payment through gifts.

Going green

Millennial clients are providing the push for home builders to downsize. According to the National Association of Home Builders, the average size of a new home is 10 percent less than the typical home five years ago. Younger clients are leading the push for green and energy efficient homes, according to a recent study by NAR.

Source: "9 Real Estate Trends to Watch in 2015," The Fiscal Times (March 27, 2015)

RE/MAX Network Reaches 100,000 Agents

 

Today, the RE/MAX network topped 100,000 in worldwide agent count. It's an incredible moment in our 42-year history. And in reality, it's much more than that.

The fact that thousands of top producers keep joining our organization is fantastic news for every Affiliate. New members add their productivity, customer base, reputations and individual talents to the network. That brings more listings, more yard signs, more advertising, more brand power, more phone calls, more Internet traffic, more referrals and more satisfied clients. The cycle continues on, as even greater results attract even more Associates.

That's our foundation and history, as meaningful now as it ever was.

So at a milestone like this, I hope everyone in RE/MAX takes a minute to celebrate what we've created together: the greatest real estate network in the world. 

Gail and I want to thank every member of this amazing organization – wherever you are and whatever your role. Your talent and hard work has made this achievement possible. You've created a brand like no other in the industry, and you've built a team that others want to be part of.

Thank you! This accomplishment is yours! 

View the press release.

Sincerely,

 

Dave Liniger
RE/MAX CEO & Chairman