33: Smart home buyers of Fort Lauderdale real estate know all the tricks - no one better than Millennials. They’re driving the market, finding the right neighborhoods, and matching those with their unique tastes. They’re then using real estate websites and Google to do their research and get their information before making a strong, educated offer.
At the Gary Lanham Group at Coldwell Banker Fort Lauderdale Beach Office, we know this real estate market driven by trends. What trends are we spotting? Home buying millennials are among the top South Florida home buyers. And they’re establishing the home buying stats and setting the stage for continuation of market activity.
We’ve written here before about the top classes of savvy Fort Lauderdale home buyers. It should come as no surprise that Millennials, also known as Generation Y, will comprise almost half, or 45%, of Fort Lauderdale home buyers in 2019. Born between 1981 and 1996 and ranging in age from 22 to 37 years old - and a median age of 29 - they are educated, rising in affluence and aspirations, and the perfect home-buying consumer for a market like Fort Lauderdale.
Those who are home buyers shop freely, dine widely, and enjoy all that Fort Lauderdale has to offer.
From Millennial Home Buyers to Baby Boomers
Not far behind is the baby boomer population. Born immediately after World War II, from 1946 and 1964, these 54- to 72-year-olds drove the American economy for more than two generations. Even as they wind down and approach retirement age, they’re still making waves in the marketplace. With 10,000 retiring daily, they remain a force to be reckoned with in the real estate marketplace.
Florida real estate professionals know this. Some 1,000 are arriving daily into Florida. They’re fleeing low temperatures and high taxes and costs of living back north.
The third significant population of smart home buyers is those seeking dollars from the homes they buy. Familiar with the vacation allure of Fort Lauderdale, they’re buying vacation homes and renting them out. Whether boomers or millennials, they sense the need for single-family and duplex and triplex homes for seasonal rentals.
What’s more, when boomers do retire, or millennials start their families, these units will be available for their next stage of life. As we’re noted here, all seem to be preparing for that next phase. Boomers will give way to millennials and what boomers were for the post-war economy, millennials will be to the next 20-plus years of the U.S. society and real estate market. This includes the home buying market.
So between the moderate climate and the low taxes, Florida remains the dream of smart home buyers almost everywhere. If you live in New York, New Jersey, or Connecticut - or any geography with a state or city income tax - Florida becomes much more alluring. It’s what they call “a no brainer.”
Boomers Making the Call
We have customers who are looking to retire. They call my office to find multi-family duplex or triplex properties to supplement their incomes. In some situations, their 401k or retirement programs remain hard-hit by the 2008 “great recession.” Some have gone away entirely. So supplemental income is important.
From boomers to home buying millennials, these home buying stats tell the tale. The home buying trends of millennials, which make them the top South Florida home buyers, are truly reshaping the Fort Lauderdale - and American - real estate marketplace.
For all these buyers, we’ve become clever as a society in how to maintain our lifestyles. Real estate has always been a leg of success in maintaining our quality of life, our lifestyle, and our standard of living.
Mortgage interest rates have been agreeable to buyers lately. But that’s not guaranteed to last. They’re currently between 4% and 4.75%, depending on the market, property, loan value and borrower’s credit score. Yet, rates could hit 6% by later this year.
For buyers, the types of properties under consideration differ by desire for real estate return on investment. From those duplex or triplex units, to single family homes, to condominiums, buyers may purchase with cash or through traditional financing. Some will allow income from rental property to help then qualify for financing.
Some millennials will follow the “Rich Dad, Poor Dad” story. In the Robert T. Kiyosaki book, the author reveals how the mindset of financial knowledge is passed down by generations, and such awareness and understanding is needed to build a life of wealth and freedom. Extrapolating this to real estate investors, as cash flow and equity continue to grow, they are able keep that first property or properties as equity for future purchases.
Some can convert that first property into a 1031 exchange (Under Section 1031 of the United States Internal Revenue Code, a taxpayer may defer recognition of capital gains and related federal income tax liability on the exchange of certain types of property, a process known as a 1031 exchange, notes Wikipedia).
More Complex Deals Open Door for Realtor Consulting
As real estate transactions become increasingly complex, this creates more opportunities to use a professional realtor for consulting opportunities, instead of just buying and selling. With the volume and variety of inventory available on the market, Realtors like our team see competition coming from all sides. But just because the Internet overflows with information, that doesn’t bring clarity. As we’ve written before, information or data aren’t knowledge. Information often requires experience to decipher hidden insights.
So if you’re in the process of buying a house right now and don’t have an agent, we’re there for you. Just have a few questions? Give us a call. Many buyers do not have agents. They can go to Zillow, Redfin, or Realtor.com, and have access to information many Realtors can access. That’s a new trend. Buyers can read the Multiple Listing Service (MLS) listings and make comparisons. They can review county tax roll data. If they’re dedicated, know the resources, and have the time, they can track listings, pending contracts, and sales.
But can they turn all those data and statistics into knowledge? Can they determine the current state of the market?
Some buyers now are going directly to the listing agent. They might hope to negotiate a stronger deal seeking a price reduction from the seller. This price reduction and resulting savings may be passed on to the buyer.
But what we’ve seen throughout Fort Lauderdale neighborhoods, like Oakland Park, Sailboat Bend, Pompano Beach and Wilton Manors, the homes are out there. Do you know what makes one community more desirable than another? Why might one fit your personal needs, where another may not?
From baby boomers to millennials, they home buying stats are self-explanatory. Home buying millennials are setting the stage for the next generation of home buyers. They’re already the top South Florida home buyers - and prepared to continue to transform the market for years to come.
Gary Lanham Group at Coldwell Banker Fort Lauderdale Beach Office is a boutique real estate organization offering sales, leasing, and brokerage services to the Greater Fort Lauderdale area. A listings agent matches home sellers with buyers and tenants with landlords. While Broward County is our universe, we focus on real estate in Fort Lauderdale, Coral Ridge, Imperial Point, Coral Ridge Isles, Oakland Park, and Pompano Beach. Call us today at (954) 695-6518 or visit www.GaryLanhamGroup.com.