TheMReport — News and strategies for the evolving mortgage marketplace.
Issue link: http://digital.themreport.com/i/997391
TH E M R EP O RT | 47 O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST DATA Top 5 Tough Markets Realtor.com looked into the markets that are toughest for millennials to break into. M ore than any other age group, millennials are feeling the one-two punch of tight inventory and consistently climbing housing prices. Realtor. com, in fact, calls the current state of the market "the toughest home buying season in history" providing a new look at the metros, which are the hardest for millennials to buy into. "Millennials want to buy, but record-low inventory is making it extremely difficult," said Danielle Hale, Chief Economist for Realtor. com. "Our analysis shows mil - lennials are facing challenges in both established markets such as San Jose and Seattle, as well as more recently popular areas like Omaha and Salt Lake City." Minneapolis is in the top five too. According to the report, homes in these five cities are increasingly out of reach for mil - lennial buyers, despite that this group of buyers is flocking to them for their strong economies and high-paying jobs. "As a result, millennials make up a higher share of the popula - tion, at 14.6 percent, compared to 13.4 percent for the U.S.," the report stated. "Household income among 25- to 34-year-olds in these five lo - cations is also significantly higher, at roughly $79,000, compared to the U.S. median of $59,800. And millennials are interested in buying. Realtor.com says in Q1 millennials accounted for 25 percent of views, higher than any other age group. But the economic hopes for San Jose, Seattle, Salt Lake City, Omaha, and Minneapolis are meeting with the economic reali - ties of living there. While the me- dian U.S. home price is $280,000, the median price in San Jose is $1.24 million. The report says the Bay Area is "replete with young students and scholars" chasing tech salaries—the average millen - nial salary in San Jose is $102,000 a year—at companies like Google and Apple. The competition for houses, therefore, is intense, and non-tech workers are increasingly getting shoved to the outskirts of the city. The same story is occurring in the other four cities, just with dif - ferent numbers. Millennials average $78,300 a year in Seattle, where the median home price is $533,000; they average about $68,000 a year in Salt Lake City, where the median home is almost $400,000; $73,600 a year in Minneapolis, where the median house can cost $283,000; and $63,500 a year in Omaha, where the median home price is the same as in Minneapolis. Nationally, inventory is 35 per - cent lower than the spring of 2012, the report found. Compared to this time last year, active listings in these five metros remain 8 per - cent lower, the age of inventory is 7 percent lower, and list prices are 8 percent higher. "Supply is nearly three times lower than the rest of the country, at 5.7 listings versus 16.1 listings per 1,000 households," the report stated. "Additionally, listings in these areas are scarcer and selling faster for more money. In these five metros, active listings are 9 percent lower, the age of inventory is 13 percent lower, and list prices are 14 percent higher from a year ago."