The look and feel of the American residential marketplace has been pretty consistent over the previous three-quarters of a century. Young people join the workforce and shortly thereafter seek to buy their first home. Renters save up to do the same. In a few years with growing families and/or improved financial situations they buy up. Occupant home owner-ship rates continue to climb. Home builders rapidly construct to meet demand. And investor landlords focus on multi-family units and apartment buildings.

      Well, many of these axioms have been called into question in the years since the most recent recession. And while one highly-publicized change related to the millennial generation turned out to be a myth, other recent developments have passed the point of a being short-term anomalies and now must be considered the new reality.

 

 

 

 

 

 

Foreign Buyers Acquire Record Number of Homes

           It is not just American investors who think residential real estate is a good bet. Foreign buyers purchased more homes in the most recent 12 month survey period (April 1, 2016 – March 30, 2017) since the survey began in 2009. (The fact that investor and foreign interest in residential real estatehas only recently been monitored is an indication of how much the market has changed.) While China placed new restrictions on the movement of money out of the country, and the rhetoric surrounding the 2016 presidential election was expected to cool interest in investing in the U.S., dollar volume of foreign purchases increased a whopping 50% from the previous year to $153 billion. Chinese buyers accounted for the biggest chunk at $31.7 billion. But coming in second and showing the greatest increase were Canadian buyers who more than doubled their U.S. home purchases to $19 billion.

           Florida, Texas and California are the primary targets for foreign buyers, accounting for half of all purchases. Europeans, Latin Americans and Canadians have been focused on Florida, while buyers from Asia and Oceania are the most active in California.

 

 Non-owing millennials do face a challenge as over 40% have not saved for a down payment, many are carrying student loan debt, and millennial earning power trails their

predecessors (they are earning 20% less than boomers at the same age).

           But perhaps the most surprising thing is the reason this generation wants to own their own home. According to recent surveys, 33% of millennial homeowners state the reason they bought was to have a better space or yard FOR THEIR DOGS. Dogs came ahead of marriage and babies as motivating factors. (To be fair, dogs were #3 behind acquiring more living space and building equity.)