Millennial Homeownership in Seattle: Challenges and Helpful Solutions
The Seattle real estate market continues to top the charts nationwide as one of the hottest in the country. This is good news for many people, including home sellers who want to earn a significant return on their real estate investment and property owners who feel confident that their values will continue to rise.
However, many Millennials are finding this to be a frustrating market. They can't seem to make offers fast enough before the houses are sold out from underneath them. With each passing month, sales prices continue to increase, while their income remains the same. There's little inventory on the market, and many of them are faced with the startling reality that they will need to commit at least half of their total income to their mortgage payment in order to secure a home in this growing city with a strong economy.
The Seattle Market for Millennials: By the Numbers
According to an article published in the Seattle Times, it's a tough time to be a Millennial home buyer in Seattle. Here's a look at recent data regarding young adults in their 20s and 30s who may want to buy a home in the city:
- The median sales price of a home in Seattle is $729,000. That figure rises steeply in the surrounding counties, where luxury homes are going for as high as $1 million or more.
- In just five years, the price of starter homes in Seattle and throughout East King County have doubled in price. Income, unfortunately, has not risen at the same rate.
- It could take the average Millennial resident in Seattle nearly 15 years to save up enough money to place a 20 percent down payment on a home in the city.
- About 9 percent of Millennials in Seattle are property owners. Nationwide, about 29 percent of Millennials own their homes.
Challenges Facing Young Adult Buyers in Seattle
It's easy to see that it's a challenging time for Millennials in Seattle who want to reach that milestone of becoming a homeowner. Inventory levels are at all-time lows, and this is particularly true of starter home inventory. This has created a hyper-competitive market in which buyers have to go out of their way (and often, into their pocketbooks) to make powerful offers on the homes that are available.
In addition to this, prices are at all-time highs. Millennials, who may be establishing themselves and are often still managing their student loan debt do not always have the extra income available to supplement the increasing housing costs. For many young adults, it's overwhelming to even think about becoming a homeowner, and they may feel like it's impossible.
Solutions to Transform Millennial Renters into Homeowners
It's not impossible, though. There are options available that may help Millennials beat the odds and overcome the challenges in the current housing market in Seattle.
Many Millennials who want to purchase their first home are starting by minimizing their cost of living expenses. Others are eliminating monthly car payments and moving into a simpler apartment with less rent while they save. Some are setting their sites to areas just outside the city in real estate markets like North Bend.
It's important to also consider various financing options. There are many different loan types available, some of which do not require a large down payment. Potential buyers may also find that there are resources available to help them get the money they need to place a down payment on a home.
Millennials are in the midst of a stage of life in which owning property can set them up for increased wealth in the months and years to come. Owning property in Seattle is attainable, even for those in their 20s and early 30s who think that they don't have the buying power to snag one of the coveted homes on the market in the city. To learn more about the current market conditions in Seattle and to find out how you can join the ranks of Seattle homeowners, contact us today.