When it comes to home buying and selling, Gen X is back in the real estate game.
By Erik J. Martin
By whatever name you call them – millennials, Generation Y or twentysomethings – consumers typically born between the early 1980s and mid 1990s continue to dominate headlines, especially when it comes to housing trends. But their bigger brothers and sisters have been making some real estate news of their own lately that should interest home buyers and sellers of any generation.
Based on a new National Association of Realtors study, Gen Xers (often born between the mid-1960s and early 1980s) have increased their home purchase activity by 28 percent in the year ending June 2016, up from 26 percent a year earlier and the highest rate observed since 2014.
The report, which expects increased home buying from Gen X to continue in 2017, credits marked growth in home values, a more robust economy and several years of solid job gains with spurring 37- to 51-year-olds to purchase more homes lately.
According to Racquel Popovic, an agent with Mirdaor Real Estate in New York City, she found the aforementioned 28 percent uptick statistic “astounding,” but can understand the drivers of this trend.
“Consider what life stage many Gen X individuals are in right now,” Popovic said. “Many are thinking about retirement and moving in or out of big cities, and their children are now the ones requiring larger homes for expanding families. Many in this generation trust property over other investments and prefer the stability of the real estate market rather than gamble with stocks or other uncertain assets.”
The real estate crash nearly a decade ago affected Gen X the hardest, many believe.
“They were in prime buying and selling mode when the market rose, but were left holding the bag when it tanked,” said Gina Tufano, Realtor with Ashburn, Va.-based Pearson Smith Realty. “Thankfully, many have recovered through building equity or savings and are no longer trapped. Now, the time has come for them to be active players in the market again.”
According to Douglas Wagner, director of brokerage services for New York City-headquartered BOND New York Properties, Gen X often has been overshadowed by millennials in media coverage because the latter is seemingly more homogenous.
“Their practically unison movements are quickly identifiable as trends, and, as such, millennials are interesting culturally,” Wagner said. “By contrast, Gen Xers live more like the Baby Boomers before them. But this new home purchasing data provides the media with an entirely new chapter to explore.”
Joshua Jarvis, owner of Jarvis Team Realty in Duluth, Ga., agrees that Gen X is a different breed from Gen Y.
“Gen Xers have families and are coming into their own in their careers,” Jarvis said. “They were generally taught to work hard to get what you want.”
Jarvis added that these qualities may not be as interesting to the media.
Wagner believes Gen X has learned from past mistakes, too.
“This generation suffered greatly from falling home values, predatory lending and the foreclosure epidemic,” Wagner said. “Some weren’t financially ready to undertake huge mortgage debt and learned from the Great Recession to live within their means.”
Gen Xers – or prospective buyers of any age group, for that matter – need to be honest with themselves about what they can afford and their future goals and needs, according to the experts.
“Before purchasing, they should be confident they have enough funds on hand after closing to carry the property into the future, even if they should see an interruption in their incomes,” said Wagner, who recommends keeping a ratio of expenses to income at or below 30 percent. “And before selling, Gen Xers need to get multiple professional opinions on a home’s value and consider where they’re going to move next.”
“[I advise buying based on] what is, not what you hope it will be,” Tufano said. “The market will likely go up and equity will improve, but what if it doesn’t? Will you be able to sell this home down the road? What if you can’t refinance? What if you get laid off?”
“[Ultimately,] think big picture, and you will likely find a home you not only love, but one that will be an asset in your portfolio toward retirement,” Tufano said.
© CTW Features