Although it’s been argued that rising mortgage rates and home values have largely excluded millennials from the housing recovery, a portion of Generation Y has skipped traditional starter homes and moved right to the top.
From Facebook founder Mark Zuckerberg to entrepreneurial Facebook users, more and more millennials are purchasing luxury properties. And with the market as hot as it is, why wouldn’t they?
Interest rates are still relatively low by historical standards, and overall consumer confidence and the belief that real estate is a wise investment have led more and more millennials to skip the baby steps and move right to a luxurious lifestyle by purchasing their million dollar (and multi-million dollar) baby.
Here are a few more factors influencing the trend:
As older generations have been through the “better and worse” of the real estate market, they realize today is in fact a great time to buy. In turn, they’re providing their children with financial assistance — from hefty down payments to purchasing a property with a child — to help them achieve the American Dream.
Young buyers have also come to the conclusion that investing in real estate is a lot less risky than riding through the stock market. Millennials have seen how the market can and will change, allowing them to be more prepared for adjustments within the real estate sphere. When prepared, a more confident decision can be made, leading them to not only purchase luxury properties but also to add investment properties to their portfolios.
A new floor plan
Supply and demand are the basics of what makes a business succeed. With more millennials in the market to buy, real estate developers are analyzing these new buyers’ wants and needs. Dynamic loft-like spaces with floor-to-ceiling windows, updated appliances and an indoor/outdoor flow could not be built faster for these 20- and 30-something buyers. And what luxury buyer doesn’t want amazing amenities? Basketball courts, pools, gyms, spas, putting greens — if it’s built, they will come!
While the market continues to improve, millennials are wasting no time putting their money where they see the most value, both financially and leisurely.