Today, we're going to be talking about the challenges that millennial homebuyers face in the central Florida real estate market. "Millenials" are identified by their age, which is somewhere between 25-35. The rate of home ownership in this group has dropped dramatically over the past decade. Around 2005, 45% of millennials owned a house. But as of 2016, this number has dropped down to 32%.
Why? Despite popular belief, it's not because they still live with their parents. It's mostly because of debt - college debt. In fact, the average graduate leaves college with around $41,000 in student debt. When they get their first job, 50% of their new income goes toward paying off this debt, leaving little to no money to spend on buying a house.
Another factor in this drop is the increase in home prices, especially in the Orlando area. On average, they have gone up 48% over the past decade, and they will continue to go up. Additionally, wages have only gone up 15%, leaving a huge gap that makes it hard to afford a home.
Inventory of homes is also very low. In the Orlando real estate market specifically, there is a deficit below the $200,000 mark. If you're looking for a property in this price range, it's extremely hard to find and even harder to buy, since you're competing with multiple buyers and cash offers.
So why should millennials try to buy? Well, rent prices are increasing just as much as home prices are. It would be smarter to use the same amount of money to invest in a long-term home that you can build equity on instead of spending it on a short-term rental property.
Millenials need to make sure they pair with the right Orlando REALTOR so they can find the right property. We recommend working with a Buyer Specialist - someone who only works with buyers. They can find properties before they come on the market, which can give you a leg up on the competition so you can find your perfect dream home!
As always, we are here to help you! Please feel free to Contact Us, and I hope that I have helped you get real estate smart.
