Business

The biggest problem of millennials with real estate today

Affordable pricing and high marketability factor into millennials’ standards to home buying, and they are what the real estate is lacking today.

Published

5 years ago

May 2, 2018

Harry Dent

Right now, millennials are the largest cohort of homebuyers in America.

Even though they’re waiting longer to get married, start a family, and buy a home—and they’re more likely to skip buying a starter home and opt for a larger property.

They have almost ZERO interest in the massive McMansions the baby boomers built. Those behemoths cost a fortune to maintain, they typically lack the desirable open floor plans and high-end amenities millennials want, and they’re usually located in hellish suburbia, far away from the hip neighborhoods and fun activities.

This is the number one problem real estate faces right now, alongside being completely unaffordable.

According to Realtor.com, large, single-family homes—which range from 2,900 square feet to 4,000 square feet—are the largest 25 percent of all homes listed on its site. Yet they get 12 percent to 45 percent less views than the typical home in each market! Also, these homes are selling up to 73 percent slower.

Besides, even if millennials wanted to buy these McMansions, they’d be hard-pressed to afford it.

The average college graduate in 2016 owed $37,172 in student loans.

The Student Loan Debt Explosion

(Source: New York Federal Reserve)

AND they’re still new to the workforce, so their wages are capped by their lack of experience, all of which makes it near impossible for them to get a bank approval for outsized mortgages.

This has led to limited supply in the housing market, which has pushed prices higher. There isn’t a housing shortage. There’s a shortage of affordable housing in desirable areas. This situation cannot and will not last.

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DISCLAIMER: This article expresses my own ideas and opinions. Any information I have shared are from sources that I believe to be reliable and accurate. I did not receive any financial compensation for writing this post, nor do I own any shares in any company I’ve mentioned. I encourage any reader to do their own diligent research first before making any investment decisions.

Harry Dent

Harry S. Dent Jr. studied economics in college in the 1970s, receiving his MBA from Harvard Business School, where he was a Baker Scholar and was elected to the Century Club for leadership excellence. Harry grew to find the study of economics vague and inconclusive and became so disillusioned by the state of his chosen profession that he turned his back on it. Instead, he threw himself into the burgeoning new science of finance which married economic research and market research. Identifying and studying demographic trends, business cycles, consumers’ purchasing power and many other trends empowered Harry to forecast economic and market changes. Over the last three decades, he’s spoken to executives, financial advisors and investors around the world. He’s appeared on “Good Morning America,” PBS, CNBC and CNN/FN. He’s been featured in Barron’s, Investor’s Business Daily, Entrepreneur, Fortune, Success, U.S. News and World Report, Business Week, The Wall Street Journal, American Demographics and Omni. He is a regular guest on Fox Business’s “America’s Nightly Scorecard.” Harry has also written numerous best-selling books over the years, such as The Great Boom Ahead, The Roaring 2000s, the Roaring 2000s Investors and The Demographic Cliff. In his most recent book The Sale of a Lifetime: How the Great Bubble Burst of 2017 Can Make You Rich (2016), Harry looks at the upcoming economic crisis and reveals how it could be the single greatest chance to build wealth we’ll ever see and how we can capitalize on such a unique and historical opportunity. He explains how many of the richest Americans in history have used this same kind of opportunity to quickly accumulate incredible amounts of money, in a short period of time.