Can Millennials Afford to Buy a Home in Seattle?
millennials can't catch a break. The "unluckiest generation" entered the job market during the Great Recession, only to have Covid pummel them mid-career. All the while, they've been saddled with student debt, stagnant wages, and skyrocketing housing costs.
While some lucky few have found a way to purchase a home, a good chunk of millennials have given up on the dream of homeownership. According to a recent Apartment List report, 22 percent of millennials who don't yet own a home expect to be "always renters." While some of this may be attributed to millennials' desire for lifestyle flexibility, more than 7o percent say they simply can't afford to purchase property. (And with the way apartment costs are rising, even renting doesn't appear sustainable in an expensive city like ours.)
Of the millennials who hope to become homeowners one day, 66 percent have no dedicated savings for a down payment, and 18 percent have saved less than $10,000. For context, a traditional 20 percent down payment on a $300,000 condo—what the National Association of Realtors deemed the median sale price in the last quarter of 2021—is $60,000. There's an even bigger gap when you look at the local picture. Northwest Multiple Listing Service notes the median sale price of condos in Seattle proper as $510,000 in March 2022—that equates to a 20 percent down payment of $102,000.
All we can say: Good luck, gen Z.
And elsewhere in real estate news...
March saw fewer bidding wars
In slightly less dismal news, Redfin recently noted that homebuying competition eased for the first time in six months: 65 percent of offers faced competition in March, down from 67 percent in February (both stats are seasonally adjusted). Of course, that still means a majority of those hoping to buy had to go toe to toe with other hopefuls.
Orchard grows to Seattle
New York–based Orchard launched its Seattle branch on April 20, just one month after expanding to Portland. As a combo brokerage, mortgage, and title company, it has the ability to monetarily back its buyers, allowing them to plunk down all-cash offers in an effort to outbid the competition. If that seems familiar, it's because Flyhomes, a Seattle startup, launched a few years ago with a similar premise. Guess we'll see who wins this bidding war.