Market Trends

What Millennial Home Buyers Are Looking For

open kitchen

When I moved to this area, close to 30 years ago, it was all about the detail. Whether a home was big or small, most of us were looking for craftsmanship -- a house with good bones. And this area is brimming with them!

But this generation of buyer isn’t looking for the same things most sellers were looking for when we purchased our houses decades ago. So, if you’re a seller who is considering doing some work before listing this season, you can really increase your home’s “appeal” by paying attention to what today’s buyers care about most.

If you’re going to renovate, open spaces are more desirable than lots of smaller rooms. For example, an open kitchen is a big draw. But it doesn’t need to be a big, fancy kitchen! Millennials seem to prefer cleaner lines and more light over fussy architectural details. Bigger windows, not bigger moldings!

In fact, it doesn’t have to be a big house at all. Millennials would rather have a home office than a formal dining room. They're drawn to things like energy efficiency, low VOC paint, smart tech accoutrements (WiFi-enabled lights, thermostats, locks, and garage doors). And, need I say it – walkability!

Also, the lower the maintenance, the better. Examples would be Hardie Board siding vs. wood clapboard exteriors, or Trex for decking over wood. This crop of buyers want to spend their weekends entertaining friends, not staining the deck.

I’ve been helping sellers prep their homes for years. I have a background in architecture and a passion for construction details. If you want to get ready for market, I’m delighted to partner with you in any way you need. 

And if you’re looking for a home in a great, walkable suburb, I can help you turn whatever you find into the home of your dreams!

 

 

4 Ways to Avoid Paying Too Much for a House in Montclair

Version 2Right now in Montclair, houses are selling for 103% of asking price. Meaning: on average, most sellers are getting 3 percent more than they list their home for. This is great for sellers! But how do buyers protect themselves from considerably overpaying for a house?

I tell my clients there are four things to seriously consider when buying.

1 - Understand the Market Conditions Most of us are familiar with the concept of supply and demand: The fewer there are of something, coupled with the more people who want the thing, the more expensive the thing is likely to be. In housing, this can be a function of many variables, but I advise buyers to become familiar with the Buyer to Seller Ratio and the Absorption Rate.

The current Buyer to Seller Ratio in Montclair is 37/100, or for every 100 sellers, there are 37 buyers. That's a lot of buyers for not much housing selection, which means the prices of "desirable" properties are likely to be bid way up.

The Absorption Rate right now is 2.7 months, which means that if no new houses come on the market, the current number of homes will sell out in less than 3 months. An Absorption Rate of under 6 months means that home prices are appreciating; under 3 months means that prices are escalating at approximately half a percent per month. In practical terms: if you bid on a house and lose it, by the time you put in a bid for the next house, it could be 1-2 percent more than it would have sold for a couple of months ago.

The lesson here is, if you find a great house in a rising market, don't underbid. You may end up paying more in the long run.

2 - It's Not Only About Price When you have to compete for a house, you can make your offer stronger by adjusting some of the terms in your contract. If you are savvy about home systems or have family who are in the trades, you might consider waiving your inspection contingency. This can be attractive to sellers for two reasons. 1. They know they won't be nickel-and-dimed for multiple repairs, and 2. They do not have to be bothered with estimates and scheduling contractors.

If you have the liquidity and you don't need a mortgage, you can make a cash offer, and waive you mortgage contingency, but you will likely have to show "proof of funds." Be mindful, however, that in the absence of a mortgage you will not need a bank appraisal, a measure that ensures that the bank is not loaning on a house for far more money than it's worth.

You can also increase the chances of your offer being accepted by writing a letter to the owners - sometimes an emotional appeal for a beloved house makes you a more popular candidate, especially if the seller has a home that's been in the family for years and is looking for just the right steward.

3 - Be Aware of Escalation Clauses and Buyer Fatigue Obviously, if you significantly overbid, you may get the house, but you'll be stuck with a big price tag. Some buyers include an Escalation Clause in their offer - agreeing to pay, say, $5,000 over the highest bidder. This can work well for some, but it wrests a lot of control from the buyer and often results in Buyer's Remorse, so most seller's agents advise against it.

If you underbid consistently, you put yourself at risk for Buyer Fatigue. You've lost 10 houses and a contender comes along and, no matter what, you will NOT lose this house. I don't have to tell you what happens in this scenario. Suffice it to say: you get your house, but at what cost?

4 - Make Your Offer Based on Your Expected Residency If you pay a bit more for a home than it's technically worth, you will feel it much more acutely if you're planning to put it back on the market in 5 years. However, if you're planning to stay for the long haul, and can ride out market conditions and amortize your investment, most consider the extra money far less of a "real" concern.

One of the things my clients seem to like about me is my interest in educating them about the housing market - in addition to finding them a great home. If you'd like to learn more or have questions about Absorption Rates and Buyer/Seller ratios in other towns- call me! 973.809.5277