When Dustin Thomas and his wife, Karen, set out to purchase their first home a few years back, they knew just what they were looking for. With their unborn son due very soon, they were seeking an affordable home in a safe neighborhood with highly rated schools.
"When we found a home with all those features and an updated kitchen and bath, we didn't waste time making an offer," Dustin remembers. "Luckily, our offer was accepted right away and we moved in just days before the baby was born."
While they were pretty typical in what they wanted, the Thomases — at 28 and 27 years old — were a bit younger and paid less than today's average first-time buyer, says Walter Molony of the National Association of Realtors. Because they were in an area of the country where homes are moderately priced, the Thomases paid just under $100,000 for their newly updated three-bedroom, one-bath home.
Molony says according to a 2011 study, the median age of a first-time buyer is 31. "The typical first-time buyer purchased a 1,570 square foot home costing $155,000," he adds.
Young buyers like the Thomases may not be purchasing in upper income neighborhoods, but they are particular about where they live. "Location — so clichéd‚ but it's the truth," says John Port, a Century 21 Alliance Realtor and author of the website YoungHomeBuyers.com. "Now, more than ever, this wave of young buyers is extremely conscious of location.
"They are witnessing firsthand how difficult it can be to resell a home in a bad market," he says. "The savvy buyer wants to be sure that if they decide to resell the home in the next five to seven years, they won't struggle because of the location."
Since so many young buyers are starting families, they are concerned about living in an area with a good school district, says Port. "The average private school in our area costs $400 per month tuition to start for one child," he says. "That $400 a month can give you as much as $75,000 more in buying power. Many buyers are looking for areas with strong school districts, knowing that when their children are old enough, they will not be forced into sending them to private school."
Port says he isn't surprised that young couples are looking for what he calls "the ooh, ahh kitchen." "Young buyers, especially women, want that 'wow' kitchen that will make their friends ooh and ahh when they see it," he says. "Granite, marble or Corian countertops, custom cabinets and overhead lighting in the kitchen can make or break every showing."
And what do men want? "Girls get the kitchen, but guys get the 'man cave,'" says Port. "Almost every couple I show a home to, the man immediately starts looking for his bar room, TV room, game room, whatever it is. This has become a huge sensation as of late."
Other top-10 requests include already updated homes, abundant functional living space, open floor plans, at least 1.5 baths, updated heating and air-conditioning units, and newer roofs and windows.
"Most of the older homes did not have open floor plans, and today's buyer wants it wide open. People love to entertain, and it's easy to entertain with a wide-open floor plan. I spend 75 percent of my day talking about which walls we can get rid of in homes," Port says.
"As for the systems, this is something that most buyers aren't looking at, but they should be," he says. "If you are buying brand new, then you have no worries here, but if you are buying a middle-aged home with a new kitchen, new baths, and new flooring, but you have a 30-year-old heater, a 25-year-old roof and 20-year-old windows, you may find yourself spending more money on those systems than you would have ever spent on updating baths and kitchens. Plus, updating a kitchen is fun — updating a heater, not so much!"
Finally, good mortgage rates and a "buyer's market" are making it easier for young people to find "more house" for less money. "Money is cheap, cheaper than ever," Port says. "Buyers are starting to think maybe it makes sense to buy the 'next house' first."
Buyers that may have been prone to starting with a townhome before moving to a single (detached) home are now thinking, 'If I buy the detached home now, I may not have to move in five years.' We are noticing that many first-time buyers are buying in higher price ranges and in areas that were considered 'move-up' areas."