It is no secret that millennials (born approx. 1981-1997) are shaping our current housing market in many ways. Because they are in the age demographic where they aren’t necessarily at their peak earning years, yet they are at the ‘home buying’ age, the inventory of entry-level homes is being greatly affected. This inventory, of course, is the price range always in high demand and when the supply is lowered, inevitably, the prices go up! This creates a catch-twenty-two situation for a generation already stretched to its financial limits.
The desire to own their own home is strong among millennials and many express a desire for the traditional single family home. However, in the markets where jobs for this generation exist (usually larger centers), the housing prices are also high. So it is important to look at all home options. Increasingly, condo living is being considered as the most viable ‘first home’ option, followed by purchasing a duplex or a townhome.
Another good option is purchasing an entry level home that has a basement suite or the potential for one. Alternatively, you could buy a place with at least 2-3 bedrooms and rent out one bedroom to a friend or family member for a few years. Having a tenant means they are paying a good part of the mortgage plus, an added bonus is that the value of the home may increase with time – and those two things combined may just make it possible to save up enough money for a down payment on something a bit bigger/nicer after a few years.
While owning a home is a worthy goal, it should not be one to jump into without considering what it entails. Besides the cost of the home itself, there are legal fees, property taxes, utilities, sometimes strata fees, and the cost of maintaining a home. So it is important to make sure you shop within your means (talking to a mortgage broker should be first priority), make sure your credit score remains high (no impulse shopping while looking for a home!), look at various neighbourhoods (even if they aren’t your first pick), and consider using your RRSPs if your broker says it makes sense.
It is always a good idea to ask your friends or family for a well-reputed Realtor® to have a coffee with to discuss your options; some are only interested in selling you something while others want to make sure what you buy is a good fit for YOU and makes the best sense given your circumstances and often we have insights into details that the general market isn’t aware of.
Home ownership is a wonderful thing ~ and the more people you have in your court as you are making this major life decision, the better!
Meeting of the Minds Blog
Contributor ~ Anne Wolfe, Century 21 Assurance Realty Kelowna