Young adults put buying a home on backburner

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Interest rates have hit historic lows and home prices have fallen, making real estate a buyers’ market. But one important segment of potential buyers is not ready to sign on the dotted line: young adults.

The number of 25-to-34-year-olds owning homes in Massachusetts plunged 20 percent between 2005 and 2010, even as the overall number of homeowners in the state increased slightly, according to the US census. The rate of homeownership, which measures the percentage of housing units occupied by owners, fell more for 25-to-34-year-olds than any other age group, declining to 34 percent from 40 percent in 2005.

A mix of economic factors and changing attitudes makes young adults less willing and able to buy homes. Ultimately, analysts said, the strength of the housing recovery could depend on this age group, which accounts for a large share of first-time buyers who can spark home sales across the market.

“That younger generation has a special role to play in driving the growth in demand,’’ said Michael Goodman, a professor of public policy at the University of Massachusetts Dartmouth. “Fewer interested and eligible buyers is not a good sign.’’

High unemployment, crushing student debt, and tight credit conditions are keeping many young adults and families from becoming homeowners, analysts and real estate professionals said. At the same time, the turmoil that has followed since prices peaked in 2005 and the housing market collapsed is changing this younger generation’s view of housing, long thought of as a safe, sure investment and prerequisite to the American dream.

Sarah Dussault, a 28-year-old self-employed social media consultant, rents an apartment in the Back Bay. Watching so many lose homes to foreclosure in recent years has made her reluctant to take on a mortgage and other financial obligations of ownership, she said.

And she feels no urgency to buy a home. Instead of setting aside money for a down payment, Dussault said, she is putting some into retirement savings and a lot into her business.

“The extra cash flow isn’t going toward owning a home,’’ she said. “My priority is my career, is what it comes down to.’’

Financially, the recent recession and high unemployment rate have put buying beyond the reach of many young people, said Chris Herbert, research director at Harvard University’s Joint Center for Housing Studies.

Rising student loan debt – up at least 35 percent since 2004 to an average of more than $25,000 per graduate, according to the Project for Student Debt – could also make it more difficult for young adults to afford a home, Herbert said.

“It impedes their ability to save for a down payment, and it almost makes it difficult for them to take on additional debt,’’ he said.

Adults under 35 made nearly one-third of home purchases in the Northeast in 2011, with about half of those sales to first-time buyers, according to the National Association of Realtors.

As first-time buyers, young adults play a critical role in spurring home sales, allowing existing owners to sell, move, and buy again. About a decade ago, first-timers accounted for 42 percent of all buyers, according to the realtors association. That fell to 37 percent in 2011.

Lisa Johnson Sevajian, a real estate agent with RE/MAX in Andover who works with many younger house hunters, said they have become far more cautious. Unlike the days of the housing boom, she said, they no longer approach properties with the idea that they can always sell at a profit in a couple of years.

As a result, they look at two to three times as many houses as they would have just a couple of years ago, Sevajian said.

“I am working with a far more educated young buyer right now,’’ she said, “who understands they may be in this house 10 years as opposed to three or four.’’

Jared Chase, 29, and his wife Rachel, 28, have been house hunting for more than a year, checking out at least 30 properties, he said. The couple, who rent a townhouse in Waltham, want a home with at least three bedrooms and a sizable yard to accommodate the family they hope to start in the near future.

“We’ve seen a couple that we’ve been really excited about, but we haven’t found it yet,’’ Jared said. “We don’t want to be moving in five years, 10 years.’’

Goodman, of UMass Dartmouth, and Herbert, of Harvard, both expect the decline in homeownership among young adults to continue for a while before stabilizing. What happens after that will depend on underlying economic conditions and government policy, they said.

Whether the government continues to promote homeownership through incentives, loan guarantees, and first-time buyer programs will have a significant impact, Herbert said.

“At some point we’re going to have to figure out what the government role is going to be going forward,’’ Herbert said. “That will have a big impact on what the cost and availability of mortgages is going to be.’’

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Zephyr Real Estate Launches Online Agent Resource Center

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Zephyr Real Estate continues its advance as the leader in
cutting-edge marketing and technology with the launch of its new
online agent resource center. This internal information repository is
home to updates in sales, marketing, technology, real estate and
tenant law, company news, and market trends. Agents are afforded a
quick, effective and proficient means of managing clients, media,
properties and information.

“This new service provides a nerve center for agents to handle all
aspects of client management from any location,” commented Randall
Kostick, Zephyr’s Chief Operating Officer. “Our top-notch marketing
and technology team continues to keep Zephyr at the forefront.”

The resource center has a friendly and inviting interface and is
smartphone compatible. Agents can manage off-market pocket listings,
clients and internet leads, and intra-company communications with
ease and facility. The search and review process for service
professionals, from artists and photographers to plumbers and
remodeling contractors, is convenient and comprehensive.

“Our goal was to streamline the user interface with simple,
straightforward design for quick use while maintaining the
professional look and feel that is Zephyr’s trademark,” stated Melody
Foster, Zephyr’s Director of Marketing and Web Development.

The center’s library is a permanent resource containing training
videos, neighborhood maps, professional development tools, relocation
materials and information on social and digital media, and a wealth
of pragmatic options.

“The on-demand training video library is an ongoing process always
expanding to include new technology, online resources and how they
affect business,” added Hud Bixler, Director of Technology. “We’re
always looking forward to the next new wave of innovation.”

About Zephyr Real Estate
Founded in 1978, Zephyr Real Estate is San
Francisco’s largest independent real estate firm with $1 billion in
gross sales in 2011 and a current roster of more than 200 full-time
agents. In 2010, Zephyr launched its new website, which has earned
three web design awards, including the prestigious WebAward for
Outstanding Website from the Web Marketing Association. Zephyr Real
Estate is a member of the international relocation network, Leading
Real Estate Companies of the World; the luxury real estate network,
Who’s Who in Luxury Real Estate; and the local luxury marketing
association, the Luxury Marketing Council of San Francisco. Zephyr
has six strategically located offices in San Francisco, a business
center in Marin County, and serves a large customer base throughout
the San Francisco Bay Area. For more information, visit .

        Melody Foster
        Zephyr Real Estate
        San Francisco, CA
        Email Contact

SOURCE: Zephyr Real Estate

Copyright 2012 Marketwire, Inc., All rights reserved.

Young and ready to buy first home

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Brandon Bianchet is about to fulfill a lifelong goal he’s had since he was just a 10-year-old boy in Pitt Meadows – which really wasn’t all that long ago.

Bianchet is now 20 and just qualified for his first mortgage, has built up a respectable down payment and is about to start house hunting.

“It feels amazing,” Bianchet says, describing the first time he met with his realtor to discuss finding his first home. “My hands were actually shaking.”

Bianchet has been saving his pennies and planning this move for a decade, but notes that current low interest rates mean it’s an ideal time to jump into the market. He couldn’t wait any longer.

Apparently, he’s not alone.

Historic low rates for both short- and long-term mortgages are attracting more young people into the market, according to the Greater Vancouver Real Estate board statistics.

And about 800 young people registered for a recent Greater Vancouver Home Buyers Association first-time homeowner seminar.

Almost 40 per cent of those surveyed at the seminar said they were planning to buy within the next year, and 34 per cent of them will make a townhouse or a condominium their first purchase, president Peter Simpson said in a release.

Those same potential buyers see housing prices, down payment and getting approval for a mortgage as the biggest obstacles to purchasing.

Bianchet agrees.

“It’s tough being young,” says Bianchet, who works for a local business providing cellular, TV and Internet support. “You have to build up a credit rating.”

For Bianchet, building up a good credit rating has been part of the plan as well. He paid off his car a year ago and now he’s accumulated the cash for his first down payment. He just went through the excruciating wait to be approved for a mortgage. The answer he was waiting for came through last Friday and he was out pounding the pavement on his next days off.

And now he’s already looking ahead to his next home. Within five years he hopes to “be looking to buy a nice little house. That’s the plan,” he says.

His realtor, Darcy McLeod, says he first noticed an increase in young couples taking advantage of the low interest rates. And he’s also seen an increase in single young men and women eager to get into the market. They aren’t waiting to go the traditional route of waiting until they’ve settled into family life before they turn the key on their own home.

“It’s great to see,” he said. “They are smart enough to get into the market or start saving for a down payment.”

While low interest rates were a big catalyst for Bianchet, he also had a couple of role models he says made all the difference. His parents bought land and built a home in their early 20s in Pitt Meadows more than 20 years ago. He credits their example with giving him the belief he could also be mortgage-free in mid-life if he put his mind to it.

“A big part of this is my parents,” he says. “I really made a difference to know that they did it,” he says.

While Bianchet had his great role models to follow, other young buyers can find plenty of help in creating their own. Banks, realtors, websites will offer you ideas on how to get ready to buy that first home.

McLeod suggests getting approval for a mortgage before heading out to those open houses and remembering you’ll need to save for legal fees and taxes.

The best idea for any young home buyer is to be prepared and to learn as much as possible about what you are about to get into. How much can you afford? What are some of the lesser-known costs to buying your first home?

Even something as simple as just what the heck do some of the words thrown around by lawyers and realtor mean: amortization; appraisal; closed mortgage; maturity date.

Canada Mortgage and Housing has a website to get you started on answering those questions.

But there’s no magic solution for getting yourself in the position where you can slap down your money and become an expert on what all those house hunting terms mean.

Just like that 10-year-old Pitt Meadows kid knew a decade ago, saving money for a down payment is the first step.

And for a growing number of young single home buyers, that seems to be the plan.