Millennials Struggle in a Tough Sellers Market
Meet the endangered species of the downtown Boston real estate market: The millennial buyer.
Meet the endangered species of the downtown Boston real estate market: The millennial buyer.
Soaring prices and cutthroat competition for a scarce number of listings has forced many young buyers out of Boston, while a ‘lucky’ few have had to shell out astronomical sums for ever-smaller digs, brokers say.
Coinciding with a larger national trend, Boston’s real estate market has become increasingly unfriendly to young, first-time buyers.
Overall, the percentage of first-time buyers plunged five percent over the last year to 33 percent, the lowest level since 1987, The National Association of Realtors reports. That decline comes as millennials struggle with record levels of student debt and a jobless rate in the double-digits.
Millennials face an uphill battle trying to land a place in Boston, where the average downtown condo price scrapes the million-dollar range and the median hovers around $600,000.
“Millennials are in a position frankly, where they’re getting priced out of the market,’’ said Neda Vander Stoep, an agent in Coldwell Banker Residential Brokerage’s Newbury Street office.
Just take investment analyst Michael Comer and his wife, Maria Milcetic, a doctor. Both in their early 30s, the couple spent five grueling months on the hunt before they finally landed a tiny two-bedroom in the South End, shelling out well over $600,000 – $150,000 more than they had originally budgeted.
Along the way, they toured dozens of condos in the South End and other downtown neighborhoods, going to open houses so packed with buyers that it was standing room only, wondering whether they’d ever find anything.
Particularly frustrating were bait-and-switch tactics some sellers used, Comer recalled. “Stuff would come on the market that seems reasonably priced, but they would put it on the market for an artificially low price to get the bidding war going,’’ he noted.
Still, Comer and Milcetic count themselves lucky as they see a number of their friends searching for more affordable homes and condos deep in the suburbs or deciding to end their search and instead stick with renting.
For those buyers who decide to tough it out, there’s not a lot to choose from. Condos on the market, especially in the starter $400,000 to $600,000 range millennials tend to compete for, are often not what buyers are looking for, notes Rich Hornblower of Coldwell Banker’s Newbury Street office.
Frequently, there’s a big gap in expectations between what first-time buyers imagine they can buy for half a million, and what they can actually get for that kind of money. “There are still a lot of people who want to buy – they just can’t get what they want downtown,’’ Hornblower said. “There are really no options in Boston under $300,000 at this point.’’
When Comer and Milcetic finally zeroed in on the condo they now own, an 800-square foot two bedroom in an 19th century, brownstone, they decided not to take any chances. They wrote a letter to the seller and, to sweeten the deal, gave the owners two months to move out after the sale.
“Frankly, the only way to get a place these days if is you bend over backwards for the seller, because they have all the power now,’’ Comer contends.
To comment, please create a screen name in your profile
To comment, please verify your email address
Conversation
This discussion has ended. Please join elsewhere on Boston.com