Bay Area Housing Market Trends You Should Know
Understanding the housing market is all about knowing up-and-coming trends, which may seem difficult, but the truth is that it can be accomplished with extensive analysis. At the moment, there are four trends in the Bay Area housing market that you might find interesting.
1. The Young People
You may know millennials as young 20 to 30-something adults who love to gossip about the latest health food store or like to wear vintage clothes because it is cool. Well, this group now represents one of the largest groups in the United States and in California.
The population has now surpassed baby-boomers who held domination for years. This means that those interested in the housing market in the Bay Area need to start catering to millennials as much as possible. Keep in mind that millennials now represent about 50 percent of all new home-buyers in the United States.
2. Minorities are Taking a Stronghold in the Bay Area
The truth is that minorities have been minorities long enough, which shows in the housing market in the United States. This group is ready to take their rightful place in the US.
The trends are starting to show that minorities are growing at an exponential rate. By the year 2020, they will account for all new growth in homeownership. What this means for you and everyone else interested in the market is it is time to cater to minorities in a more aggressive way.
Creditors, mortgage companies, and others who are in the business need to start rearranging the way they advertise to accommodate new cultures. It is said that one of the largest minorities to target is the Hispanic population, though there are others to pay attention to like Asian Americans.
3. Renting is Still a Big Deal
Yes, there is a big group of people who are looking to buy homes. In fact, 33 percent of young people expect to buy a home some day. The problem is that most millennials are still young and are not getting married as early as other generations.
This means that their hunger for ownership is not as strong. It is estimated that about 59 percent of the 22 million households that are set to bloom between the years 2010 and 2030 will not be seeking a normal home but will rent instead.
Those are big numbers, not to mention that many young people are seeking different types of accommodations like house-sharing. Some of these statistics are important to know and to prepare for. At this time, it is important to figure out how to make homeownership appealing to a group of young people who simply do not care much about it.
4. Affordability is Still Taking its Toll
Many people fail to realize that markets flourish when there is enough people who can afford what you are selling. No home will sell, and the entire US economy will plummet if everyone is poor.
Affordability is definitely something that should concern anyone who is in the housing market as it could drive prices down. It is estimated that the bottom two-thirds income levels are having trouble affording much beyond what they already have.
Worse than that, most people who are in the bottom two-thirds of income levels have to pay almost 90 percent of their income to rent in San Francisco because the rent is so high. This means that some of these people are going to have a very hard time making ends meet let alone save up enough for a down payment on a home.
There is not much that you can do about that, but it is something to pay attention. This could make selling a home virtually impossible unless rent caps are imposed or another form of relief is given to some of these people.
Clearly, there is a lot to consider when it comes to the housing market in San Francisco. Some of the trends are good but others are not. No one has the answers, but at least you are now better prepared to deal with the housing market in the Bay Area. Visit us today.