Riding the Trillion-Dollar Real Estate Recovery Roller Coaster

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Most of the time, on a personal level, the housing market and buying a home exists only peripherally. Since I was asked to approach home buying from not only a personal basis, but as a representative of my generation as well, I’ve been thinking a lot about what it means to own a home.

Up until now, my life plan included graduating from college, getting a good job, living in an apartment for a few years and then buying a modest home.

Now I’m wondering if, perhaps, this is a somewhat juvenile picture. I mean, if Rob Kardashian, with all his oodles of cash, isn’t ready to move out on his own, I’m probably not either.

So I don’t really think about the housing market and I don’t think a lot of my generation really does. Sure, we hear about it all the time. We know that the real estate market has been in turmoil and uncertainty seems to be the watchword. Since buying a home, though, isn’t a priority for most people my age, we tend to hear this stuff, but it doesn’t affect us, so we file it away or use it as cocktail party banter when speaking with older folks.

In my circle of friends, our priorities right now include paying off our student loans, working and saving money. The best way to do that is by staying home with Mom and Dad. I know older generations probably find this idea abhorrent, but it’s a huge trend right now. While “I’m living at home” would’ve been a socially awkward declaration in the past, now it’s becoming an accepted norm.

I don’t want to veer too far off the subject, but I need to clarify that this isn’t just something happening in the United States. There’s even a term for it: “parasite single,” popularized in Japan. It’s quite common for Japanese youth to mooch off of their parents while living carefree lives. Then, when Mom and Dad get old or die, the child takes over the house.

Riding the Trillion-Dollar Real Estate Recovery Roller Coaster.

As a result, the kids stay single (because let’s face it, dating while living with parents complicates things), don’t move out, don’t get married and don’t have children.

As an aside right here, those of you real estate agents who hope to build a “Millenium Generation” niche? It might not be as lucrative as you’re hoping. From what I’ve heard, Boomers will be buying and selling more real estate than we will.

Anyway, I spoke with my friend, Kat Lai, who is a year younger than I am but is thinking about buying a home of her own. Her parents are originally from Taiwan and are planning on moving back there soon. Kat will be left in the states solo, so she needs to think about what she’s going to do for housing.

I asked her why she was considering purchasing a house instead of just renting and she said that “now is the best time to buy a house.” She says that prices are so incredibly low, interest rates are rock bottom and she “might as well just buy.” 

She isn’t viewing the purchase of a home as an investment, nor does she consider it “settling down.” She simply wants a place to live, far from the maddening apartment scene.

I asked her for her opinions on the real estate recovery infographic by RealEstate.com and she was indifferent. She feels it doesn’t affect her.

While Kat does make quite a bit more money than I do, it struck me as odd that she’s set on putting at least 40 percent down on her home purchase. She’s been saving, and her parents will contribute, to get to the magic 40 percent figure.

Once she explained to me why this was so important I understood and I think I’ll be adopting the same strategy when I decide to purchase a home.

So, overall, I’d say that my generation, as a whole, doesn’t pay a lot of attention to housing market news, and whether the market is “good” or “bad” won’t sway our decision when it comes time to buy. What will matter to a lot of us is that we don’t fall prey to the next crash. To that end, I’ll be saving up until I can put a minimum of 50 percent down on my home. Only if I know that I own at least 50 percent of the house outright will I feel comfortable taking what appears to be a gamble: investing money in the real estate market.

As an older friend explained to me, our feelings make perfect sense. Even though my generation doesn’t pay close attention to the housing market, we’d have to be living under a rock to not know that it’s been devastating, that people’s fortunes have been wiped out and that currently the market is a roller coaster.

She said that this current state of affairs is an example of that old saying  “the iniquity of the father,” although it’s not necessarily being visited upon the sons (and daughters), it is certainly freaking us out and, quite possibly, changing the way younger adults approach buying real estate.  

What I find sad is that to Boomers and other, older generations, real estate was the most secure investment vehicle for their money. For my generation, though, it’s a gamble and we’re leery of it, no matter the condition of the market.