Invest In Real Estate

As with any type of investment vehicle, anyone who wants to succeed in the realm of real estate investing needs to be a studious observer of market trends. Tracking everything from unemployment, job creation, population migration and economic stability, to housing inventory, home prices and rental yields in any particular region is essential. Just like anyone else with goods and services to sell, the most successful investors are ones who own the supply when the demand comes calling. However, after the Great Recession hit, the next great wave of first-time homebuyers, the millennials, did not come calling. Instead, they were either attending college, or trying to start their careers fresh out of college. In a report released October 2014, entitled, “15 Economic Facts About Millennials,” released by the White House, the President’s Council of Economic Advisers or CEA, noted that the millennial generation, which accounted for one-third of the U.S. population in 2013, will shape the nation’s economy “for decades to come.” It should come as no surprise then, that with the baby boomer generation heading toward retirement years, and possibly downsizing or moving into retirement or assisted living communities, it would behoove real estate investors to follow where the next generation of homebuyers and renters is migrating to live, work and play. A realtor study highlighted millennial migration patterns. This July, the National Association of Realtors, or NAR, released a report entitled, “Best Purchase Markets for Millennial Homebuyers,” which took into account a lot of variables that can affect real estate investors when making a decision on where to buy investment property. “The premise of the study is that we have had this very low homebuying participation among young people. Many factors held back the millennial generation from home buying,” says NAR’s chief economist, Lawrence Yun. According to the NAR report, homebuying among young adults under age 35 peaked in 2005, at 43 percent, before declining to 36 percent in the first quarter of 2014. “Limited job prospects, student debt and flat wage growth have combined with tight credit conditions, and low inventory to price millennials out of some of the top cities, such as New York and San Francisco,” Yun said. “However, NAR research finds that there are other metro areas Millennials are moving to where job growth is strong, and homeownership is more attainable. These markets are well-positioned to soon experience a rise in first-time buyers as the economy improves.” In conducting the study, NAR looked at a number of factors, such as the local employment situation, the inventory of homes, the migration patterns of millennials (where they are moving to) and the affordability of homes in those areas. Out of the top 100 metropolitan areas analyzed by NAR, 10 markets stood out as projected to gain or to witness an increase in millennial homebuying in the upcoming year. Those metropolitan areas are: