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If you’re one of the chosen ones whose parents loved you enough to give you a trust fund or take out a second mortgage to finance your college tuition, you may be one of the few of our generation looking to make the leap into home buying. Personally, I just completed my exit counseling for graduate school, so I know that it’ll be a looooong time before my Ramen Noodle days are over (side note: a Master’s degree is worth nothing). While I’ll be an apartment dweller well into my thirties, according to Zillow, 42% of the home buyers’ market are millennials, so, apparently, you’re all much more financially savvy than me. To help out those of us hunting for a home, Zillow decided to launch a millennials-only real estate website.
While lauding the fact that millennials are now buying homes, Zillow apparently thought their website needed to be dumbed down a bit in order to make sure we could actually use it. According to Zillow’s CMO, we’re “way more likely to go over budget.” I want to be offended, but the millennials who can afford homes probably didn’t go back to school for that finance degree, so I kind of get it. The new site is also more app-friendly, because if there’s one thing old people know about Millennials, it’s that we love apps. What could go wrong?
In addition, Zillow reserved a new domain name to take on this endeavor. Instead of coming up with new branding, Zillow purchased RealEstate.com, which had to be one of the first thousand domain names ever reserved. I literally don’t even want to know how much money they paid for this domain just to make a millennial-friendly site, but I digress. As Zillow (rightly) assumes, Millennials are more concerned with total costs of home purchasing, including closing costs and an all-in monthly cost that includes a down payment. While this does sound more intuitive and useful than finding out what your current rent “Zestimate” is, the point remains – why couldn’t they have just revamped the Zillow website, saving god knows how much on a new domain name and not insulting the intelligence of Millennials in the process?
When it comes time for me to buy a home, will I use RealEstate.com? Probably. But will I complain about it? Also yes. Zillow, I appreciate the effort and the convenience of the new site, but lay off on the marketing for Millennials, okay? Unless you really want to buy us out with free bottomless mimosa brunches, food truck festivals, and HBO subscriptions, then I’m 100% on board. What can I say? I like what I like. .
[via Business Insider]
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Steph W.
Steph W. is a new Master's degree graduate with an intern's salary and six-figure taste. She realizes her expectations far exceed reality, so she spends her days pinning away Loubs she pretends are in her physical closet instead of her virtual one. Her hobbies include attempting to trapping her boyfriend into marriage before he finds out how insane she is and pretending that Black Box wine tastes as good as the kind she could afford when she was gainfully employed. Send her tips for getting out of student debt at recruitchairtsm@gmail.com
@therecruitchair
“Way more likely to go over budget”…LOL. Yeah cause millennials brought you the credit and housing crash of 2008.
Congrats! You wrote an article that isn’t about millen….. Oh wait.
From what I’ve heard, buying a home is an investment and apparently you end up saving money overall. That’s what my homeowner friends say, anyway. As a 24 year old, I’d say at least 10 of my former classmates have bought homes in the last 6 months and it gives me severe anxiety. Especially people buying homes with someone they’re not married to. Living with your S/O is something I’m 100% on board with, but buying a home is such a process and commitment it scares the ever living hell out of me. I recently moved into my first real adult apartment and thought that was a big deal…
Your first house should be a multi-family house that will make you passive income while also allowing yourself to live for free. Once you save up enough again to move out then buy another and keep the passive income flowing so if you happen to lose your job, you have a fallback. Keep the cycle going until you don’t have to work anymore and then move to Santorini, sip chilled wine on the cliff edges, and watch as the world slowly implodes on itself in mass chaos and financial ruin!
If you’re smart about purchasing a home and are knowledgeable about the housing market (knowing when its best to buy, specifically), then its a great investment. If you buy a home now, prices are generally well over market value and recent homeowners will find themselves in an upside down situation. I bought a home when I was 20 years old, it was a buyers market, rates were low and now I have about 100k in equity.
sup?
I used to be the same way until I realized that it’s mostly people from high school buying $100K starter homes in our hometown, which I have zero interest in. Not to mention starter homes are actually one of the worst investments you can make as a young person. Also, Redfin is way better than Zillow.
The only people who buy houses super young are either married, very rich, or live in a place with zero property value.
#TeamRedfin
For me, my friends are all buying homes in our college town, which I also have no interest in doing. Why is it such a bad investment? I’m genuinely interested.
It likely costs you way more money in the end as opposed to waiting until you’re ready for a better home. If you’re buying a starter home ~25 years old it’s likely about 70% of your mortgage payments for the first 5 years will end up going towards interest costs on your loan, so you end up building very little equity in the starter home by the time you’re ready to move into a nicer home. Then you end up spending more money fixing up your starter home to sell and then you end up paying the closing costs and realtor fees during the move. In the vast majority of cases, it would be far more beneficial to rent for a few extra years and save enough to be able to buy that nicer home to begin with.
It costs something like 7-10% of the value of the home to buy it then sell it again (depending on the market), so it needs to appreciate by at least that amount just to break even. That’s super tough in a stable market over a short (<5 year) time span.
The other theory is that you get your mortgage payments back when you sell it, but that’s not true if you sell too fast. Mortgages are structured so that you’re paying primarily interest for the first ~10 years of it. So you’re paying just interest at a rate meant to service something like double the amount of the home (obviously a gross oversimplification there) and you only get the actual amount of the home back, minus what’s left on the mortgage, when you sell.
That said if you can get a home that will probably appreciate well and you’re planning on being there for a significant amount of time, it’s still a good investment. But if you know you’re going to grow out of it in 3 years, just rent.
Home ownership comes out to be more expensive than renting in the long run, so unless you buy at the right time in the right place, you’re probably better off renting. Also, when you rent you don’t have to worry about another housing crisis and waking up one day to realize that you now owe the bank tens of thousands of dollars more than the house you live in is worth, and have 20 years left on your mortgage. But, hey. Maybe they made the right decisions.
The irony of a millennial blogging about a company’s product created specifically for millennials is super.
Recently bought a house and sold it a year later to move. Buying a house under the age of 30 is sketchy simply because literally all of the data says you’re going to change jobs a lot. Buying instead of renting severely limits what you can take job wise in other places. Don’t give yourself the headache I had trying to sell a house to move cross country.
Recently Facebook alerted me to my memory that 9 years ago we closed on our first house (at age of 26). I still own that first house, and it’s rented out, because it’s still worth, uhh, about $35k less than we paid for it. Awesome.
As a millennial who bought a home in their 20’s I have one major recommendation. If you know that it isn’t your “forever” home then treat it as an investment. I bought my house knowing it would become a rental property eventually so I looked for things that would appeal to my future tenant like good schools. I am transferring next month having owned the home now for 3 years and rented it out for 110% of my costs of ownership. Buying a house is a great investment in your 20s if your disciplined enough to treat it as an investment and not become emotionally attached to the home.
Why do people act like buying a house is literally akin to being a millionaire? As long as you don’t live in NYC or SAN Fran most houses are fairly reasonable.
Took a quick look at the site and they have a section listing out “Popular Cities”.
Waiting on the PGP Rankings of RealEstate.com’s Popular Cities for Millenials
I realize this wasn’t the point of your article, but my master’s degree isn’t “worth nothing.”, Different fields of study at any level are going to have wildly different real-world value. Sorry if you chose one that isn’t working for you.