Real Estate Round-up: Millennials are buyers

Yes, we have a housing shortage. Are you tired of hearing me say that, again and again? I am. But sadly, it is true. On the horizon, we have a massive group of buyers that are finally coming of age, who will want to buy their first home, but will this be possible?

Let’s start with a little background. There are approximately 37.9 million people between the ages of 35 and 44. There are approximately 41.1 million people between the ages of 25 and 34. These two groups form the millennial generation. The millennials make up a massive population group within California. The median age of the current first-time homebuyer is 34. The older portion of this group has already purchased homes, but the younger portion of this group is just approaching the median age to purchase a home. In the next 10 years, 44.9 million people will turn 34. That’s an increase of 7.4% from the past 10 years, when 41.8 million people passed the threshold. While this group may or may not purchase homes as readily when they hit their mid-30s, by the sheer heft of their numbers, they will have an impact on the market.

Good news comes with this information. It’s a comforting idea in a quickly cooling housing market that there is significant structural, long-term demand moving into home buying. This demand increases my confidence that the slowdown we are currently experiencing will correct itself before too long. The current home value declines in some expensive markets can be seen in this light as an important reset for down payment affordability for homebuyers of the future.

There is also some concerning news. The rate of single-family construction is still behind the pace of building we experienced in the 90s, a more normal time in housing when home values and incomes took turns in the lead. Without an increase in truly new supply, we will need boomers to start downsizing in earnest to lubricate the housing market. As it currently stands, boomers are more often aging in place contributing to low inventory numbers.

Many of the current first time-time homebuyers purchase their first home in a more urban environment. When families start to need more space for growing families, when they’re searching for high quality public education, when they want affordability, they leave their urban homes and look for a place like Fallbrook to move to. Are we ready for them?

As a community, we need to attract younger families. Fallbrook offers many of the amenities that these 34-year-olds are looking for, like privacy, views, a peaceful lifestyle and a friendly community. But Fallbrook is missing many important amenities that are nonnegotiable for this group. They want good schools that offer quality experiences like dual immersion, STEM programs and IB programs. The schools must be highly rated. They want extra-curricular sports and organizations that enhance their child’s experience and build a complete student. They want a thriving business district with stores and restaurants.

When we moved here in 1992, Fallbrook had the complete package. Fallbrook schools were highly rated, course offerings met the highest standards and sports and extra-curricular activities were excellent. The central business district had strong retail stores, restaurants and businesses. Fallbrook has grown a lot since then, but the schools and business district has not kept pace with that growth. As a community, we need to evaluate what we can do to improve these areas, because we need to encourage a younger generation of families to move here. What are your thoughts? How can you help?

Kim Murphy can be reached at [email protected] or (760) 415-9292 or at 130 N. Main Avenue, in Fallbrook. Her broker license is #01229921, and she is on the board of directors for the California Association of Realtors.