Thought about putting this in the Funny Stuff thread:
Millennials emerging from the pandemic with extra savings are putting that money to use in the housing market.
finance.yahoo.com
The article states that a lot of millennials moved back in with their parents last year, saved money, and are now deploying those savings into down payments on homes. Note that millennials were born from 1981-1996. That makes them from 40 years old down to 25. I just can't imagine living in a bedroom in my parents home at age 30 or 40.
The next part that caught my eye was the comment "We’re also seeing one of the biggest changes in generational wealth from the baby boomers over to their millennial children.” Are they saying that parents sending money to their kids is helping fuel the housing market? When I've applied for loans, they look at your income and savings and any transactions not related to payroll (like a parent giving you money) gets special scrutiny.
As I posted earlier on here, we got an offer on our home without even listing it. It was $400,000 over our last appraisal from our refinancing last summer. They ended up walking away 1 week later because they couldn't fit the size pool they wanted in the yard. We decided if that's how ludicrous the market is, lets list the house for even more. We don't have to move. So we listed it for $500,000 over that last appraisal and had multiple offers the first day it was shown. We got an offer as-is not contingent upon an inspection or appraisal. They had their banker call our realtor and explain the appraisal was irrelevant - the buyer's credit and financial stability was so pristine they would issue them a loan in any structure.
Where I'm going with this is that my gut tells me to disagree with this article. I don't think people that old are living with their parents. I don't think they are getting money from their parents (maybe the 18-25 year olds are). I think these are highly educated people making and saving lots of money who are also making lots of money on cryptocurrency, tech stocks, and other investments like that.
In our town, there isn't really anything for rent either. Tons of people moved here (we live in one of those so called Zoom Towns) and filled up the rental market because there wasn't anything for sale. Building material costs are through the roof, fueling the market for existing homes even further. Our cost of living is low here (our property taxes are about $1,000 per $400,000 of house per year).
My last comment on this article (with their BUY NOW!) language is “There is a shortage in inventory that is not going to be caught up for a while." They said the same thing in 2007. I'm not calling a market downturn. But it will happen at some point. Its always a momentum play. People think it will never go up when it crashes, and people never think it will go down when its surging. Just like 2007 (and before), when emotion takes over, the market will be flooded with homes. It will rebalance at some point. People weren't just all homeless last year LOL.
www.protocol.com
www.cnbc.com
