Longboat Key, Florida | November 7th, 2019 Baby boomers and retirees traditionally lead buying activity in the Southwest Florida residential property market. Moving forward, however, don’t forget the millennial generation and what they like and need if you’re planning to sell your residence.
First-time homebuyers, recent industry data indicate, are becoming younger and being drawn from the millennial demographic. The average age of those buying their first residence has been estimated at 36 as of 2018, down from age 39 reckoned in 2010.
Some millennial buyers have lately been seen in the local real estate market. Their presence is, particularly noticeable at the communities of the Lakewood Ranch master development. Already married and starting a family, these younger set of buyers notably focus their searches more on price ranges rather than on neighborhoods.
More New Buyers in 2020
This piece of anecdotal evidence jibes with a recent industry survey indicating that millennials buying their first house would boost the U.S. real estate market starting next year. Across the country, it is estimated that there are from 8.31 million to 9.2 million of these first-time homebuyers entering the market starting 2020 up to 2022. These figures represent a significant jump from the 7.64 million new buyers which entered the market from 2016 to 2018.
Favorable economic conditions are behind this surge which surpasses any three-year span since the Great Recession. Specifically, the survey’s analysts attributed the rising number of millennial first-time homebuyers to wage growth, low unemployment, low interest rates, and slowing price appreciation of residences for sale.
The analysts further noted two underlying reasons for millennials wanting to own a residence. One is their need for privacy and the other is the millennials’ desire to invest and grow their equity instead of paying monthly rentals. Some of those surveyed also cited marriage or having a family as their top reason for their plan to buy a house.
Builds That Fit Millennials
Residential property developers in Southwest Florida now appear geared up for the expected spike in millennial home buyers starting next year. Housing starts in Sarasota, Manatee, and Charlotte counties revved up during the 2019 second quarter. Significantly, the gains in the annual starts pace were primarily among residential construction priced between $200,000 and $600,000, a sweet spot for millennial first-time homebuyers.
From April to June this year, homebuilders in the three counties broke ground on a total of 1,706 single family residences. This total represents a 28 percent increase from the first quarter. The increase was most pronounced in Sarasota which posted 659 housing starts, a 20 percent quarterly advance and a 9 percent gain on an annual basis.
The good news here, especially for aspiring sellers of pre-owned houses, is that the supply of the local residential property estate market remains constrained. The inventory of completed new residences remains low, with 1.2 months’ supply in Sarasota and 1.1 months in Manatee. Charlotte comes out lowest with just half-month supply. The combined inventory of resale houses in Sarasota and Manatee has also been on a downtrend, with a 5.3 percent decline recorded in September for the two counties.
Given all these indicators, it now looks a great time for selling a residence. Younger buyers are coming in, and the market as a whole would want to see more residential choices. Call our Judy Kepecz-Hays team or e-mail us, so we can help you set a marketing plan tailor-fit to the mix of buyers in our market territory.