HOW MILLENNIALS CAN AFFORD TO OWN A HOME - SOONER THAN LATER
Home ownership is all but impossible for Millennials in the high-cost U.S. West and East coast markets and this phenomenon may be coming to your area soon!
AFFORDABILITY GAP FOR FIRST TIME HOME BUYERS
Prospective new homeowners find a huge affordability gap without home equity from a previously owned home to apply towards the purchase price of a new home, which limits how much home they can afford. The money they saved for the down payment and closing cost plus the maximum home loan amount they qualify, falls short of the cost of the average home in high-cost areas. When the average home price is well above the purchasing power of the average wage, two paychecks are needed to purchase a home. But when two paychecks can't be stretched to make the average home affordable, what can new homeowners do to make the dream of home ownership possible? Look for work that does not require them to live in the same area as their job where homes are not affordable for them!
WORK IN HIGH-COST AREAS AND LIVE IN AFFORDABLE LOW-COST AREAS
Well-educated employees, who work independently for a company in a dispersed employee network, have the freedom to live where they want and still earn the money to afford a home and lifestyle elsewhere. This is a exciting opportunity to break away from having to live in areas with low affordability, but it also subjects you to remote workforce competition worldwide. To remain a viable employee, you must commit to delivering the work product you are required to do and continually add work experience and education to remain competitive for the rest of your life. But, if you think about it, this was always the case. Being geographically located near the work center didn't guarantee you earning a living wage long term. You must grow and be able to efficiently and effectively do your current job while gaining new skills through collaboration with coworkers and getting additional education. You must make growth and expanding your skill set part of your workday... the rest of your life.
Recently a young married couple living in Newport Beach, CA were paying $3000 in rent per month for a one bedroom, one bathroom apartment. They had good jobs in California and were paying off their tuition loans, but purchasing a home in the area, even with both working, was an impossible dream. They wanted to move to an affordable area and asked for my help. They were delighted to learn how affordable the Gilbert area was and purchased a new 2500 sq. ft., two-story Morrison Ranch home in Gilbert, Arizona, having a house payment that was less than their rent in Newport Beach, while continuing to work remotely for their same companies headquartered in Southern California! A Win-Win!
A web designer living in Huntington Beach, CA wants to move back to Arizona because he can't afford to purchase a home in Huntington Beach. And as soon as he finds work in Arizona, he wants me to find him a home to buy. And I asked him why he would want to do that? Since he can do web design anywhere, I suggested looking for a high paying job in California or keep the one he has now, as long as they agree he can do it from his new home in Arizona. I suspect he could earn more money working for a California company, versus an Arizona company. My suggestion is to "think outside the box" and look at all his employment options.
ABOUT THE AUTHOR
Sam has 28+ years of residential real estate knowledge and experience. Learn more about these AZ cities in his service area: Chandler, Gilbert, Mesa, Phoenix, Scottsdale, Tempe, and Arizona retirement communities. Let's get the whole family to move here to be together. And Sam brings his vast real estate knowledge to help you decide which home or multi-unit is your best choice based upon your criteria for the perfect real estate investment. Plan for the future and build a retirement investment portfolio that includes real estate, too.
Arizona Associate Broker, Graduate, REALTOR® Institute, CRS, e-PRO, SFR
Berkshire Hathaway HomeServices | Arizona Properties