Rising interest rates or steeply escalating prices could dampen this housing market – and so could a wide generation gap.
Young adults forming families are always big driver of housing sales, buying from the older generation. “Along with new construction, listings by Baby Boomers, as well as from older birth cohorts … will constitute the supply of residences to purchase,” explains Gary Engelhardt, Syracuse University professor of economics.
But young buyers don’t always like old features in a home, real estate agents say.
Whether or not a home sells quickly or near its list price often depends on whether owners (who may have been in a home since before prospective buyers were born) can make the home attractive by current standards.
Young buyers aren’t necessarily biased against older homes, says John Terebey Jr., broker-owner of ERA Properties Unlimited, Princeton, N.J. “In fact, ‘walkability’ is usually a strong desire, and the homes that are in walking distance of town and schools are usually older,” Terebey says.
Still, just as clothing fashions change, so do housing design trends.
Here, a look at what younger buyers want in a home:
A recent survey of Millennials (ages 18 to 34) by the home builder PulteGroup found that among the top home desires are an open layout for the kitchen and family rooms that allows for easy entertaining and ample storage.
The next generation always wants space for TV, movie and sports watching, a pleasing entry, good outdoor living or deck space and the ability to conduct business at home.
The survey is “spot on,” according to Terebey.
Young buyers in different regions can have different priorities, however, says Val Nunnenkamp of the Marlton, N.J., realty Prudential Fox and Roach. “The no. 1 thing young buyers want here is a finished basement.”
Consider this hypothetical situation: You’re the owner of a four-bedroom home you’ve lived in since it was built in 1985, and you’ve made just a few improvements.
An experienced agent should be able to gauge how a home’s condition will impact the probable sales price, Nunnenkamp says. Especially when key components – roof, furnace, air conditioner – are beyond their prime, buyers will want to see the items replaced or will take the cost of replacement into account when they make an offer, he says.
On the other hand, when it comes to outdated design, the cost is more difficult to calculate. Each owner must weigh the cost of potential changes against how the changes may boost their homes’ marketability, he adds.
Agents say they often recommend inexpensive design changes that can help update a home.
Young buyers read shelter magazines, observes Adrian Foley with EWM Realty International, Coral Gables, Fla., and like the dramatic light fixtures they see featured in those glossy pages. “Adding a new fixture in a living or dining room can not only have a dramatic effect on the space, but also detract [from older features],” she says.
Similarly, Nunnenkamp says that if buyers can walk away with one impressive image, they may ignore other older features. He especially likes spending around $3,000 or $4,000 “to update a bathroom in a really great way.”
Outdoors, simple steps like cleaning a patio and adding flower pots highlights the outdoor as a living area, adds Ed Pape of Choice Realty in North Texas.
Overall, it’s best if you can update the home long before you decide to sell and move away, Terebey says. “Then you can enjoy it.”