Deep-pocketed Gen Y buyers turning to high-end real estate
Wealthiest 10 percent to account for one fifth of U.S. home purchases over the next three years
A growing group of wealthy young buyers is making inroads in the high-end real estate world, acquiring properties at prices and speeds brokers say they’ve never seen before, the Wall Street Journal reported.
Low interest rates and lower real estate prices have joined forces to make it easier than ever for people in their 20s and 30s — referred to as “Generation Y” or “millenials” by demographers — to buy investment properties. Millenials now constitute the second-largest group of recent home buyers, making up 28 percent of the pool, according to a new report by the National Association of Realtors.
“In the last two months, half the folks I sold homes to were young entrepreneurial types — and they were all buying homes for over a million dollars,” Michael Rankin, a managing partner at TTR Sotheby’s International Realty in Washington, D.C., told the Journal. “A few years ago, that kind of buyer was invisible.”
And while home ownership rates have fallen among the middle-aged, the rate has grown for buyers aged 25 to 34, according to U.S. Census Bureau data cited by the Journal. Brokers are responding to the shift by advertising through new channels. For example, at 250 Bowery on the Lower East Side, the marketing team is using social media to promote the condominium building.
Brokers and analysts say that the wealthiest 10 percent of millennials will have a profound effect on the future real estate market, with their spending accounting for one fifth of all dollars spent on primary-home purchases over the next three years, according to the 2013 Survey of Affluence and Wealth in America cited by the Journal. [WSJ] — Julie Strickland