This article first appeared in the St. Louis Beacon, April 13, 2009 - The economic outlook has been bleak for long enough now that it’s easy to ignore reports with optimistic conclusions. But here’s one showing that people in their 20s and early 30s are enthusiastic about the housing market and the prospect of home ownership.
While current homeowners have seen their property values take a nose dive, the upshot could be that more young people will have a chance to buy houses that just last year seemed out of their price range.
The Concord Group, a real estate consulting firm, earlier this year surveyed more than 200 people in the 20-to-34 age range nationwide. Most of them live in urban areas, work in service-based professions, are college graduates, have a household income of less than $100,000 and currently rent.
Billed as the “first major survey into Generation Y’s perception of the U.S. housing crisis,” the report shows that most respondents see real estate as a good financial investment. Half of the young professionals say they are likely to buy a home within the next three years. (Only 14 percent say they're "very or somewhat likely” to buy in the next year.) Also, half of those surveyed said tax credits or lower interest rates would motivate them to buy a place sooner.
About 80 percent say it will take two or more years for the economy to start improving, and that it will take two or more years for home prices to start rising from current levels. Not surprisingly, people said raises at work and lower real estate prices would be the primary motivating factors for them to buy.
Proximity to work was the No. 1 factor in deciding where to live. Most respondents say they are willing to pay a premium to live closer to their job. They are also quite interested in living near alternative modes of transportation. Yet most say they are planning to eventually leave the city for a life in the suburbs.
Also noteworthy is that five years from now, only 10 percent of respondents expect to be in the same house, 22 percent expect to be in the same job, 41 percent expect to be in the same city and 59 percent expect to be in the same state. More than one-third of those surveyed said they expect they'll be in their current residence for under a year.
The majority of young professionals say their next place will be a rental. The most popular answer for the question, "How old will you be when you buy your first home?" was 25-30.
Parents reading this might also be glad to know that only 40 percent of young people say they are are planning on receiving help for a down payment on the purchase of their next home.