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Apartment life is booming in America. Meanwhile, home ownership is at its lowest rate in a century. What happened to the American housing dream? Is home ownership going the way of the dinosaur? Not likely…but there is a shift afoot.
Home ownership is still a sense of pride for millions of Americans, but it’s not the must-have it used to be. Living as a renter no longer carries with it a sense of failure or shame. People are proud of their 2 bedroom apartments! Why the shift? Here are three of the main factors that we’ve noticed at Ali Safavi Real Estate.
Price
There’s no denying that the economy is good. Most people who want jobs have one and the stock market is relatively strong (for now). However, income remains stagnate. People are not making enough money to keep up with the rising cost of real estate. Even if you can get a loan, It can be very difficult to save up for a down payment. So it’s not that many renters don’t want a home…they’re simply priced out of it. Unfortunately, in some areas they may be priced out of renting as well. The current housing shortage is causing prices to climb across the country. On the bright side, that’s good news for real estate investors.
Fear
There is still a fear factor among potential buyers. If you’re over the age of 30 you remember the effects of the housing crash. Many millennials simply don’t want to take the risk, even with the benefits that come from home owning.
Location
No one stays in one place anymore. Two years – that’s how long most millennials plan on staying at their current job. Living in the same town your whole life doesn’t have the same appeal as it once did. Why buy a home if you may move across country? Or, why spend $50,000 on a down payment when you could explore Europe for two months. These questions would have seemed laughable only a few decades ago. Now, they’re affecting the real estate market in a variety of ways.
Investing in rental properties was, and still is a great investment. Just don’t rush the processes. Take time to find a good deal that fits within your budget. Do some research on potential locations. Talk to neighbors to get an idea of vacancy’s. Is it a shrinking city or a neighborhood on the rise? Opportunities are abundant, but always beware of a bad deal.
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