Millennials worry about overpaying in hot home market

The tight housing inventory is creating stiff competition for homes and driving up prices in many markets, according to a Berkshire Hathaway Home Services survey.

About 71 percent of prospective homeowners – mostly millennials – said now is a good time to buy a home, but 72 percent say home buying has become increasingly competitive and 76 percent fear they’ll overpay.

The survey showed baby boomers reluctant to sell their homes have added to the shortage. Boomers said they hesitate to sell because values are rising and because they would rather not shop for a new home now.

“The world seems to be waiting on millennials to make a move in all facets of their lives,” said Gino Blefari, CEO of Berkshire Hathaway Home Services. He said rising home prices will likely move more boomers off the fence as they retire. “Home values have mostly recovered from the downturn, and homeowners may have more equity than they’re aware,” he said. “Equity gives people latitude to make important changes in their lives.”

Andrew Ratner, a Gallo broker in Rehoboth Beach, said the local single-family-home market is up about 17 percent over last year, but inventories are lower than normal and the market is competitive.

According to the survey, shoppers want to stand out to sellers. About 45 percent said they’d be willing to cover closing costs. About 36 percent said they will send a personal letter to sellers. Most millennials – 58 percent said they would put down a larger deposit to show their commitment to the sellers, and 31 percent said they would offer more than the asking price.

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