Millennials faces high student debt, soaring rents, and increasing property prices. But a new study shows they aren’t the generation who is dealing with the greatest hardships when it comes to breaking into the housing market.

Instead, Generation X—those born between the mid-1960s and early 1980s—is the age segment that is having the toughest time saving up to buy a new home, a report from the National Association of REALTORS® shows of about 4,000 responses from non-homeowners.

Generation Xers “are at an age where they may have children, car loans, credit card debt,” says Jessica Lautz, NAR’s managing director of survey research. “They’re also less likely to be able to move back home [with their parents] to pay down debt.”

About 47 percent of Gen X survey respondents reported having difficulty saving for a down payment compared to 23 percent of millennials.

Generation X may have felt the brunt of the financial crisis. “They were very likely to have purchased a home in the housing boom and then be hit by the housing bust,” Lautz says. “Generation Xers were most likely to have a home that was underwater.”

Without enough home equity, Gen Xers have struggled to trade up to larger homes as their families have grown.

Millennials, however, still comprise the largest overall share of non-owners, according to the NAR survey.

Eighty-two percent of non-owners, across age groups, say they aspire to own a home in the future. But the reality is that many still can’t afford it.

“They believe that homeownership is part of their American dream,” says Lautz. “[But they’re] feeling priced out of the homebuying market.”

Source: “Which Generation Is Struggling the Most to Buy a Home? (It’s Not Millennials),” realtor.com® (Feb. 7, 2018)

A Manhattan real estate broker with Douglas Elliman has sued representatives of pop superstar Taylor Swift, alleging the singer refused to pay commission after the purchase of a townhouse.

The suit claims a written promise to the unnamed broker for exclusive representation of Swift in the purchase of the townhome. The broker claims to have shown two properties to Swift, including the townhouse she purchased, along with other work on the star’s behalf, including providing blueprints, measuring the townhouse with a laser device, and introducing the former owner of the townhouse to representatives for Swift. Swift had already owned the property next to the townhome she purchased last year for $18 million.

The lawsuit states that another broker took the commission for the transaction. Douglas Elliman is seeking $1.1 million in damages, or about 6 percent of the property’s purchase price.

The lawsuit does not specifically name Swift, but the companies she has used in previous real estate transactions—Firefly Entertainment, 13 Management, and Euro Tribeca, The Real Deal reports. Representatives for Swift have declined to publicly comment on the lawsuit.

Source: “Taylor Swift Sued by Real Estate Broker Over $1M Commission,” PageSix.com (Jan. 25, 2018) and “Bad Blood: Elliman Accuses Taylor Swift Entity of Stiffing Broker on Commission,” The Real Deal (Jan. 25, 2018)

 

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Despite rising prices, buying a home makes more sense than paying increasingly high rents in more than half of the U.S. Buying a median-priced home is more affordable than renting a three-bedroom property in 240 of 447 or 54 percent of U.S. counties analyzed, according to a new report released by ATTOM Data Solutions, a real estate data firm.

Renting a three-bedroom property requires an average of nearly 39 percent of weekly wages across the 447 counties analyzed for the report. The least affordable markets for renting are: Marin County, Calif. (where it takes 79.5% of average wages to rent); Spotsylvania County, Va. (75.5%); Honolulu County, Hawaii (71.9%); Sonoma County, Calif. (67.6%); and Kings County, N.Y. (67.4%).

But a rentals are still often a better deal in highly populated areas. Although buying is still more affordable than renting in the majority of U.S. housing markets, that majority is shrinking as home price appreciation continues to outpace rental growth in most areas, says Daren Blomquist, vice president at ATTOM Data Solutions. Renting has clearly become the lesser of two housing affordability evils in many major population centers, with renting more than affordable than buying in 76 percent of counties that have a population of 1 million or more.

Source: ATTOM Data Solutions

 

The majority of buyers who obtained a mortgage last year made a down payment of less than 20 percent, according to the National Association of REALTORS 2017 Profile of Home Buyers and Sellers. The median down payment in 2017 was 10 percent, according to the report.

The bulk of buyers down payments came from their personal savings, but a fraction also came from the sales proceeds of a previous residence or assistance from family or friends. Among first-time buyers, 61 percent made an average down payment of zero percent to 6 percent, according to the November 2017 REALTORS Confidence Index Survey.

Source: 61 Percent of First-Time Buyers Made a Low Down payment in November 2017, National Association of REALTORS Economists Outlook blog (Jan. 2, 2018)

 

The crypto currency bitcoin is increasingly coming into play in real estate transactions across the globe. One recent listing describes a 9,000-square-foot beachfront Malibu home on the market for $45 million, and the owner says he’s willing to accept bitcoin as part of the payment from a buyer.

I’ve been interested since bitcoin started, and I’m always watching what’s going on, Wei Tzuoh Chen told CNBC. It’s going to be the future. It just depends which one is going to be stabilized in the current market.

Chen says he has already invested in cryptocurrencies. He acknowledges that his neighbors think he’s crazy for accepting bitcoin for his home sale. He realizes the currency is largely unregulated and does carry some risk.

According to the current situation, if you buy the property with cryptocurrency, it’s difficult to identify the cost of the real estate because it fluctuates so much, Chen told CNBC. The government will have a hard time to tax or put a property value on the house you are going to sell.

Chen says the majority of bitcoin purchasers are outside of the country. For this type of house and this amount, I think we’ll attract more international buyers than from our country, he says.

New millionaires who invested in cryptocurrencies may be looking to cash in on real estate. Because cryto currency can be so volatile, Chen says he only will accept part of the payment in it; the rest in dollars.

I’m not saying it’s safe, Chen told CNBC. I’m just willing to take the risk for investment. Just like everybody else.

Chen’s home, designed by architect Ed Niles, stands out from other homes in the area. It has multiple angles in every direction and the exterior walls are mostly windows.

Source: Why This Homeowner Will Accept Bitcoin for his $45 Million Mansion,CNBC (Jan. 11, 2018)

 

Millennials have been stereotyped as a generation that lacks savings or money management skills. But the data isn’t backing that up.

Sixteen percent of millennials ages 23 to 37 have $100,000 or more in savings, which is double the number of young people who had that much stowed away in 2015, a newly released survey from Bank of America shows. Nearly half or 47 percent have $15,000 saved, up from 33 percent in 2015.

Millennials came of age during the Great Recession and the financial crisis. They’ve faced high levels of student loan debt. But still, the survey shows that many are getting their financial lives in order, and home buying is increasingly on their to-do list.

Despite stereotype of millennials as being foolish with money and not long-term planners, they are behaving very responsibly when it comes to managing their money, says Andrew Plepler, global head of environmental, social, and governance at Bank of America. They deserve more credit. Millennials are actually doing better than you and they might think.

Sixty-three percent of millennials surveyed say they are saving, compared to 64 percent of Generation X and 75 percent of baby boomers. Fifty-four percent of millennials say they have a budget; 60 percent say they feel financially secure.

The top priorities for their savings: in case of an emergency (64%), retirement (49%), and buying a house (33%).

Still, millennials do acknowledge having plenty of financial stressors, including:

  • Not saving enough (35%)
  • My career path (24%)
  • Not planning and saving for retirement (21%)
  • Not being able to afford a home (20%)
  • Health costs (19%)

Source: 2018 Better Money Habits Millennial Report, Bank of America (Winter 2018) and Millennials: 1 in 6 Now Have $100,000 Socked Away, USA Today (Jan. 23, 2018)

 

The winter off-peak period may be the best time for investors to snag a deal on a single-family rental property.

Single-family rental investors paid 6.6 percent less per square foot on the same property during the winter of 2017/2018 than they did during the spring and summer buying season of 2017, according to a new analysis released by HomeUnion, an online real estate investment and management firm.

For the second year in a row, our study found that the wintertime is the best season to acquire rental properties, says Steve Hovland, director of research for HomeUnion. Median home prices drop substantially during the colder months, while rent losses remain marginal for landlords.

Investors are finding they can acquire higher-yielding properties in cold-weather markets like in Omaha, Neb.; Chicago; and Hartford, Conn., as well as more temperate areas such as Charlotte and the Dallas/Fort Worth metroplex, according to the analysis. Rental properties in Home Union’s top 10 metros are discounted between 20 percent and 32 percent in the winter months.

Home prices are seasonal as many buyers and sellers delay an acquisition or disposition to avoid a move during a school year, Hovland says. As a result, smaller homes occupied by empty nesters or childless families are more likely to change hands.

The following metro areas made Home Union’s list as best places to buy rental properties in the wintertime of 2018:

Source: HomeUnion

 

5G is one of the buzzwords at this year’s CES, formerly known as the Consumer Electronics Show, in Las Vegas Jan. 9-12. The promises are big behind the fifth-generation wireless technology that is expected to make smartphones and other devices ultrafast.

5G is to be 100 times faster and five times more responsive than 4G and 4G LTE systems, the technology currently being used. For example, you’ll be able to stream high-res VR content without any lag time. The super speeds will help make smart-home technology and interconnected digital devices more efficient.

AT&T has announced that it will roll out 5G networks in a dozen U.S. cities by the end of the year and to 82 more markets by mid-2019. Verizon says it will have 5G networks in a handful of cities by year’s end as well first with Sacramento this year.

5G’s promise of greater speed and overall network performance brings huge opportunities not only for video but in the internet of things, 4K video, augmented and virtual reality, smart homes and cities, autonomous vehicles, and much more, says John Donovan, chief strategy officer and group president of technology and operations at AT&T.

But there may be some caveats when it comes to 5G, such as you may have to pay more to use it and you may even need a new phone to accommodate it, analysts note.

Nevertheless, tech companies are investing as much as $275 billion over the next seven years to build out 5G networks, according to a report from Accenture, a consulting firm.

By Melissa Dittmann Tracey for REALTOR Magazine

 

Many commercial projects may face delays in 2018 due to rising demand, particularly for warehouse and office space. A shortage of skilled construction workers and rising construction costs two items that are also plaguing the residential market are expected to push back timetables on many commercial projects in the pipeline, according to the CoStar Group.

The labor shortage may mean developers will have to pay more to get their buildings constructed because contractors are able to charge more due to the high demand. The construction field had 381,000 job openings in October, the largest number of openings in a 17-year tracking period, according to the Bureau of Labor Statistics. There are 11 percent fewer construction workers today than prior to the last recession.

The average length of construction delays in the multifamily sector could increase to four months by the end of 2018, according to CoStar’s forecasts.

Source: Rising Costs, Labor Shortage May Add to Commercial Construction Delays in Coming Year, CoStar Group (Jan. 4, 2018)

 

Across the country, neighbors are fighting against development of affordable housing, even if the proposals are far from their homes. Homeowners increasingly want to have a say on what development occurs in their communities beyond their own lot boundaries.

As such, developers are struggling to build affordable housing for seniors, high-rises, and tiny homes.

Homeowners are concerned about the quality of their schools and safety of neighborhood parks and they believe that greater affordable housing may jeopardize that not in my backyard idea.

Communities always need to be changing, Vicki Been, the faculty director of New York University’s Furman Center and a former commissioner of Housing Preservation and Development in New York, told The New York Times. And we can’t have a process that gives every individual sort of a veto over change.

Homeowners fear the impact that greater affordable housing could have on their property values.

As people are increasingly living in urban areas really close to each other, it starts to be the case that so much of the value of your property is bound up in things that are happening outside of your parcel,says Lee Fennell, a law professor at the University of Chicago.

Homes are the source of wealth for many people. We ask home equity to do so much more for us in terms of providing retirement, providing a bridge during drought years, allowing us to have collateral for other kinds of loans,Nathan Connolly, a historian at Johns Hopkins University, told The New York Times. Then you add schools and crime into the mix. To the extent that people can control anything,he says in referring to property values, they try to control for that.

Source: How Not in My Backyard Became Not in My Neighborhood,The New York Times (Jan. 3, 2018)