Arizona home ownership
Real Estate

Arizona home ownership – Millennials warming up to the idea

(Source: EastValleyTribune): Wayne Schutsky – Millennials as a whole may have put off home buying longer than those who came before them, but they are warming to the idea of Arizona home ownership. Chandler and Gilbert are uniquely poised to take advantage of this market shift, said Realtor Mindy Jones Nevarez, one of the agents behind ChandlervsGilbert.com, a website that provides comparison information for people considering a move to either of the two communities.

Older millennials – people ages 27 to 36 – made up 28 percent of home buyers in the country in 2016. That ties them with Gen Xers for the largest representative share of total home buyers last year, according to the National Association of Realtors Home Buyer and Seller Generational Trends Report 2017.

Add in younger millennials, which made up 6 percent of buyers, and the demographic group as a whole represented the largest demographic of home buyers in 2016, according to the report.

The ChandlervsGilbert website is a collaborative project by Nevarez’s Amy Jones Real Estate Group and Merrill Jencks’ Big Helper Real Estate Group and is geared toward younger home buyers in particular because they are more apt to look online for information.

East Valley millennials, who have gravitated toward rentals in recent years and helped spur an apartment boom throughout the Valley, are now interested in home buying due in large part to rising rents, Jencks and Nevarez said.

“Cost for rent has gone up significantly, especially in the Southeast Valley,” Nevarez said, noting millennials have “really gravitated toward renting” in the last five years.

“We are able to show them that they can spend less on a mortgage payment” than they currently spend on rent, she said.

Median apartment rents in Gilbert have gone up 3.4 percent over the past year while those in Chandler have risen 5 percent in the same span, according to Apartment List, an online rental marketplace.

Nevarez and Jencks also said that rising interest rates are spurring the members of the generation to buy homes now rather than later, when their money will not go as far.

Predictably, age also is playing a role.

“A lot of millennials are at the age for starting families and suddenly living close to nightlife is less important,” Jencks said. “They want to live in safe family neighborhoods and don’t want to be super-far away from work, which makes Chandler and Gilbert attractive.”

Both cities have done a good job of developing a variety of different housing, employment and entertainment opportunities while maintaining things like good schools and low crime rates that are hard to find in larger cities, Nevarez said.

The concentration of high-paying jobs in Chandler and Gilbert is another attraction for young home buyers.

Factors that historically have kept millennials from buying homes include concerns about income and debt.

In 2015, the average income of people ages 25-29 was $27,100, well below the average of $30,300 in 2000, according to Harvard University’s State of the Nation’s Housing Report 2017.

This has led millennials to put off home buying in favor of living with parents longer or opting for renting.

However, as millennials age, they should form households at rates similar to previous generations, according to the report.

With employers such as Intel, Orbital ATK, Banner Health, Go Daddy, Verizon, Bank of America and others, Chandler and Gilbert have access to millennials with the incomes necessary to purchase a home.

According to the Gilbert Department of Economic Development, the town’s “Up and Coming Families” demographic has an average age of 30.7 years and a median household income of $64,000.

In Chandler, the average age of all residents is 34.9 years old and the median overall income of the population is $75,633, according to the city.

Those incomes also work as an incentive to buy.

“In addition to soaring rental prices, there are the tax benefits,” Jencks said, noting that millennials “are getting well-paying jobs and paying more in taxes than ever before.”

The types of homes millennials are buying run the gamut.

While many younger buyers are interested in older homes with character, there is a limited supply of them in Chandler and Gilbert, Jencks said.

Both Jencks and Nevarez have seen younger buyers gravitate toward new builds and updated homes over fixer-uppers.

“The whole idea of sweat equity is not of interest to them,” said Jencks. “They would prefer to pay top dollar for a home that is move-in ready.”

They are also willing to purchase smaller homes with higher-end amenities over larger dated properties.