Housing: What Do You Do When You Can’t Afford to Buy?
Imagine you are a well-off millennial planning a move to Salt Lake City, Utah. For the last few weeks prior to your move, you spend countless hours online looking for a home that meets your needs but doesn’t destroy your budget. You discover that finding a home isn’t as easy as you thought it would be. Why? Because housing prices have risen so far, so fast, that you are being priced out. What do you do?
Salt Lake City’s housing market has been tight for several years. Prices have risen accordingly. But the main city on Utah’s Wasatch Front is not alone. According to data reported by Business Insider, median home prices in the U.S. have increased some 39% since the 1970s. Furthermore, areas in California, New York, and Florida have seen a 40% increase just since 2000.
It’s gotten so bad that Business Insider says even millennial millionaires don’t want to purchase in some of the most expensive areas. It’s not because they cannot afford it. It’s because they cannot get enough for their money to justify buying.
Buy a Fixer-Upper
One solution for well-off millennials is to forget about buying the house of their dreams and purchase a moderately priced fixer-upper instead. This is apparently a trend in some areas. It is a trend that makes complete sense. If $1 million will not even get you 1,500 square feet for a turnkey property, why not spend half that amount on a renovation project and put the extra money into the property?
Fixer-uppers have always been attractive to lower income buyers who really cannot afford turnkey properties. But they are apparently more attractive to wealthy millennials too. That’s not a bad thing. Selling fixer-uppers to families who can afford to rehab them ultimately increases the value of such homes and the neighborhoods they are located in.
Buy a Manufactured Home
Believe it or not, manufactured housing continues to do extremely well despite yearly predictions that it is destined to fail. That’s not surprising when you can get a good manufactured home boasting upwards of 1,500 square feet for around $70,000.
Let’s be clear about one thing: we are talking about a style of home that used to be referred to as a ‘mobile home’. These are homes manufactured in factories and delivered to sites on top of steel girders with trailer wheels underneath. They are mobile only in the sense that they are built elsewhere and then delivered to the site on which they will rest. Once on site, they remain there permanently.
Seeking Alpha reports that the manufactured housing sector had another stellar quarter to close out 2018. In addition, data shows that 10% of all the new housing starts thus far in 2019 have been manufactured houses, leading to approximately 7% of the U.S. population now living in a manufactured home.
You Can Just Move
If buying a fixer-upper or manufactured home doesn’t interest you, you can always consider moving. Business Insider says that’s the trend in some of the worst areas, like San Francisco and New York City. It’s not so much of a trend in smaller cities like Salt Lake, where housing prices fluctuate but generally remain low. Salt Lake real estate agents at firms like cityhomeCOLLECTIVE are working hard to find homes for new arrivals moving to the area for work.
It’s easy to move if you are wealthy and don’t have to be tied down to a particular area for your job. But if you’re middle class and work 40 hours a week, you either have to stay put or hope you can find a job someplace else. That’s just the way it is.