Real estate investors wanting to keep their money in Colorado, should look no further than Denver, thanks to the millennials, the upcoming real estate generation, which is predicted to dictate market trends for decades to come, according to a story in U.S. News & World Report.
The story said, “In a report released October 2014, entitled, 15 Economic Facts About Millennials, released by the White House, the President’s Council of Economic Advisers or CEA, noted that the millennial generation, which accounted for one-third of the U.S. population in 2013, will shape the nation’s economy ‘for decades to come.'”
“This July, the National Association of Realtors, or NAR, released a report entitled, Best Purchase Markets for Millennial Home buyers, which took into account a lot of variables that can affect real estate investors when making a decision on where to buy investment property.
“According to the NAR report, home buying among young adults under age 35 peaked in 2005, at 43 percent, before declining to 36 percent in the first quarter of 2014.
“‘Limited job prospects, student debt and flat wage growth have combined with tight credit conditions, and low inventory to price millennials out of some of the top cities, such as New York and San Francisco,’ said Lawrence Yun, NAR’s chief economist. ‘However, NAR research finds that there are other metro areas Millennials are moving to where job growth is strong, and home ownership is more attainable. These markets are well-positioned to soon experience a rise in first-time buyers as the economy improves.'”
“In conducting the study, NAR looked at a number of factors, such as the local employment situation, the inventory of homes, the migration patterns of millennials (where they are moving to) and the affordability of homes in those areas.
“Out of the top 100 metropolitan areas analyzed by NAR, 10 markets stood out as projected to gain or to witness an increase in millennial homebuying in the upcoming year. Those metropolitan areas are:
* Austin, Texas
* Dallas, Texas
* Denver, Colo.
* Des Moines, Iowa
* Grand Rapids, Mich.
* Minneapolis, Minn.
* New Orleans, La.
* Ogden, Utah
* Salt Lake City, Utah
* Seattle, Wash.
Other metropolitan areas, which show strong potential for attracting Millennials include:
* Madison, Wis.
* Nashville, Tenn.
* Omaha, Neb.
* Raleigh, N.C.
* Washington, D.C.
“If there is a downside, it is that next year interest rates are expected to rise by 1 percent to 5 percent, Yun said. Although higher interest rates are always a deterrent to buying, he does not feel even a one percent rise will cause potential homebuyers to panic.”
Read the entire story at www.money.usnews.com/money/blogs/the-smarter-mutual-fund-investor/2014/12/01/10-us-real-estate-markets-investors-should-watch.
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