Ready to Buy? Get Ready to Move
First, some good news, from Trulia: housing prices have been rising most in old-people areas. Gen-X’ers, Boomers, and Seniors are all facing crazier markets this year than last, with prices 7.4% – 9.4% higher than they were. By contrast, prices in areas favored by Millennials are only 6.1% higher than in 2013. Great, right? Except Millennials still can’t afford to buy.
When young adult renters are asked if they will buy a home someday, a whopping 93% say yes. You’d think it would be good news for them that prices are rising more slowly in the markets where they currently live. Not so fast though. Prices might be rising more slowly in millennials’ favorite metros. But affordability is nonetheless a big challenge in those markets.
To see this, compare the millennial population share in each metro with the percentage of homes for sale that a typical millennial household can afford. In metros with higher millennial shares, homeownership tends to be less affordable for this group. For instance, in Austin, Honolulu, New York, and San Diego, 20–34 year-olds account for at least 23.5% of the population, putting those metros in the top 10 for millennial share. But fewer than 30% of homes for sale in those markets are within reach of the typical millennial household. Some markets with a high millennial share are more affordable, including Oklahoma City and Baton Rouge, but they’re the exception.
In other words, people of my generation: if you’re ready to buy, you’ll need to get ready to move.
Millennials are well-known at this point for renting in cramped or even squalid conditions in order to be where the action is. This phenomenon isn’t restricted to America, either. Consider Beijing, where an estimated one million strivers are living illegally underground.
“Part of why there’s so much underground space is because it’s the official building code to continue to build bomb shelters and basements,” Kim says. “That’s a lot of new, underground space that’s increasing in supply all the time. They’re everywhere.”
She says apartments go one to three stories below ground. Residents have communal bathrooms and shared kitchens. The tiny, windowless rooms have just enough space to fit a bed.
“It’s tight,” Kim says. “But I also lived in Beijing for a year, and the city, in general, is tight.”
With an average rent of $70 per month, she says, this is an affordable option for city-dwellers. …
“They’re all the service people in the city,” she says. “They’re your waitresses, store clerks, interior designers, tech workers, who just can’t afford a place in the city.”
People can stand all sorts of things when they need to, if the conditions are temporary. Ask Nicole, who’s putting up with Life Minus Kitchen. But then what? As an NPR commenter puts it, “A place to sleep, shower and cook is all you need when you’re young, single and experiencing big life in the city. It’s when you can’t graduate on to a proper place that you go nuts.”