Need help with the downpayment? Ask Mom & Dad

Given the high cost of real estate coupled with crippling student loan payments and it’s not surprising that 8 out of 10 millennials are having difficulty coming up with a down payment for their first home. And, given these circumstances, it’s not surprising that many millennials are turning to their parents for financial help in one way or another.

Sometimes it may be an outright gift: the National Association of Realtors says that 25 percent of home buyers under the age of 38 receive financial gifts from friends or parents to help with the downpayment.

Another 20 percent move from their parents home into their first property as they are able to save faster by living at home.

Multi-generational Households Increasing

According to a report by HousingWire based on U.S. Census Bureau data 20 percent of all households are currently multi-generational. This is equivalent to approximately 64 million people.

This trend is true across all racial and age groups led by Asian (29 percent) and Hispanic (27 percent) households.

Age-wise, millennials are most likely to be be living in a multigenerational household with 33 percent of those 25 to 29 currently living with their parents.

New construction is beginning to account for this trend by building more mother-in-law suites, two main floor master bedrooms or backyard cottages.

What do buyers want from their real estate agent?

A new study by Owners.com reveals what home buyers are doing on their own and what they’re looking to their real restate agent for.

  • 55 percent of homebuyers do their research online before moving on with their agent
  • 66 percent of homebuyers want streamlined access to additional listings
  • 61 percent would like to access data such as home appreciation, neighborhood information and walk scores in one place
  • 60 percent appreciated an agent who thoroughly understood their buying perferences, thus saving them time in finding the right home
  • 23 percent said that the most important benefit of working with an agent is helping them negotiate the best offer
  • 47 percent wished agents better provided bundled services to save the homebuyers money

Buyers’ Enthusiasm Drops

The National Association of Realtors says that 68 percent of consumers are positive about their ability to purchase a home, down from 72 percent during the last quarter of 2017. Renters feel even worse: only 55 percent say that now is a good time to buy, down from 60 percent previously.

On the other side of the equation, 74 percent of current homeowners say that now is a good time to buy, up from 69 percent.

Of course, should these current homebuyers actually decide now is a good time to sell – and buy – and put their homes on the market, this will certainly help the short supply of homes.

Rents Keep Rising

Rents keep rising in the Bay Area and analysts predict there is no end in sight. The continued supply shortage has kept rental units at a premium.

Nationwide, rents rose 2.3 percent over the last year. In the Bay Area, rents rose 3 percent year over year in March in San Jose, 1 percent in San Francisco and 6 percent in Oakland. Currently, a two-bedroom apartment in Danville can go for as much as $5,400 a month.

Experts also point to the issues such as rent control in San Jose which are keeping many residents in their current homes.

Fixing Bay Area Housing

A recent summit of housing developers, city leaders and resident advocates – Urban Land Institute’s “Housing the Bay” – in San Francisco discussed ways to fix, or at least improve, the current housing shortage in the Bay Area. All agreed that the siutation is so critical that no reasonable idea should be dismissed. Some of the possible solutions included:

  • More duplexes or fourplexes as the demand for single-family homes continues to severely limit supply
  • Boost production by changing – i.e. lowering – city fees
  • Create a middle-income financing structure
  • Remove Prop. 13 from commercial properties

California Ranks 49th in Housing Per capita

According to a report by McKinsey Global Institute, California ranks 49th in the country for housing per capita. Only Utah ranks lower.

The report went on to say that California must build close to 4 million units by 2025 to house the anticipated population.

California currently has 358 housing units per 1,000 people which is considerably lower than than the U.S. average of 419.

Improve Your Credit Score Before Buying

These days would-be homebuyers – particularly first-time buyers – need all the help they can get in today’s market. Trulia offers five suggestions for improving your credit before applying for a mortgage:

    >Pay your bills – ON TIME: There is no surer way to harm your credit than to be consistently late on paying your bills. Make this a priority!
  • Check your credit score: How can you improve your credit score if you don’t know what it is. Go to Annual Credit Report to find out.
  • Become an authorized user: Make sure the primary cardholder reports you to the credit bureaus as an authorized user and has good credit.
  • Get a secured credit card: An excellent way to build a credit score and to learn how to use a credit card. Make sure the issuer reports to the credit bureaus. You won’t use this forever but it’s a good way to begin.
  • Start with a credit-builder loan: Start building a credit history. Make your payments, improve your score.

Building Boom in Oakland

There’s a building boom in Oakland with most of the new homes in apartment buildings in central neighborhoods including downtown, Uptown and Jack London Square. The developer CIM Group has announced the construction of 333 new apartments in Jack London Square.

The project will be be eight stories consisting of studios, one-, two, and three-bedroom apartments. Completion is expected by the end of 2020.

CIM is also building 288 units at 1100 Clay Street.

Return of California’s Redevelopment Agencies?

.Seven years ago, during the height of the recession, Governor Jerry Brown eliminated an urban renewal program billions of dollars annually for economic development and low-income housing.

Given the state’s current housing crisis, many lawmakers believe it’s time to bring it back. While much of the money which previously had gone to redevelopment has been funneled to other worthwhile projects such as schools, many feel that it’s time to re-invest in low income housing.

Most analysts agree that this is not likely to happen during Governor Brown’s final year in office but many are looking to a new administration in January to get something done.