Not OK, boomer.
Many young Americans are worried they’re facing a lifetime of renting while they watch baby boomers snap up homes — often paying all cash.
Recent data from the National Association of Realtors reveals that boomers — those aged 60 to 78 — now comprise 42 per cent of all homebuyers, while Millennials — ages 29 to 44 — make up just 29 per cent.
Meanwhile, the average age of first-time homebuyers has now hit a record high of 38.
Angering Millennials even more, nearly half of boomers own their homes outright, while 95 per cent of Millennials are reliant on mortgages.
Bianca Ramsawak, 34, who lives in New York City, is among a rising number of young Americans who say they’re being priced out of the housing market after repeatedly losing bidding wars with baby boomers.
Desperate to buy her first home in the tri-state area, Ramsawak keeps being squeezed out by older Americans with deep pockets.
‘I am a Millennial buyer that lost out to boomers with cold hard cash when my husband and I were purchasing our first home,’ the PR consultant told the Daily Mail.
‘All the deals that fell through were due to all-cash buyers or buyers that had a larger cash down payment. Even if we had a slightly higher offer, the sellers were favoring more cash on the table.’
Millennial Bianca Ramsawak wants to buy a home but keeps getting squeezed out by boomers
Younger generations are having trouble due to a toxic mix of sky-high rents, record property prices, low salaries, and mounting student debt.
In 1984, when boomers were in their prime buying years, the median US single family home cost $78,200. Today, it’s $403,700 — a jump of nearly 80 per cent.
‘After four bidding wars, we lost out,’ Ramsawak said, adding that one property went for six figures above the listed price.
‘We had to adjust our budgets accordingly, knowing we can only win by making offers substantially over ask.’
Ramsawak and her husband continued to tour countless open houses and showing appointments, only to be met with more disappointment.
Rubbing salt into the wounds, she even has to face a reminder of their frustration as she walks her dog every day past a house that the couple lost out on.
‘The boomers would pull up in their new sports cars, downsizing as empty nesters and having all this magical cash,’ she told the Daily Mail.
‘We didn’t get a house, my husband and I were pretty defeated. At that point, we were hoping some boomer would just adopt us.’
Ramsawak even has to face a painful reminder as she walks her dog every day past a house she bid on but was bought by an older couple bypassing financing altogether
Ramsawak remains in the city for now as she keeps losing out on properties in the tri-state area
Jessica Lautz, NAR deputy chief economist and vice president of research, confirmed the trend: ‘In a plot twist, baby boomers have overtaken Millennials — the largest US population — to become the top generation of home buyers.
‘What’s striking is that boomers are purchasing homes entirely with cash, bypassing financing altogether.’
Much of that advantage stems from economic restructuring in the wake of the 2008 financial crisis because boomers had already bought before the downturn.
Nearly two decades of rock-bottom interest rates also helped.
Another Millennial, Lesley Davis, 29, a teacher from southern Massachusetts, has had it with the boomers who are killing her own dream of owning a home.
Younger generations are much more likely these days to rely on financing and family support, which Davis tells the Daily Mail she does not have.
Recently, she toured a duplex in southern Massachusetts, which she described as a ‘dump’, that was listed for $849,000.
‘There were 10 nice cars there, including a cyber truck,’ Davis said, a sign that she knew meant competition would be fierce.
Boomers have an advantage because they benefitted from decades of low interest rates, rising equity and investment gains
After leaving the open house, Davis didn’t think the home was worth the asking price so put in a lower offer.
‘It was $150,000 under listing,’ she said.
Not only did Davis find out she had been rejected but that the house had sold to a much older couple who put in an offer $50,000 over asking price with no contingencies.
‘This means that the buyer had waived inspection, waived any debt financing, and had $1 million to blow on this duplex. I cannot compete.’
With prices so high, she added, she would have to pay a huge mortgage on anything costing more than $800,000.
‘That is another downside of not having cash. Boomers had 3 per cent mortgages for years and mine will be double.’
In March, Davis made another offer on a duplex that fell through, again to an all-cash buyer.
And again an offer on a house in April did not work out.
She said it would be at least another two years until she could even compete with boomers in the real estate market.
‘By then, I will have $125,000 for a down payment on almost any house. I need more than most because I am going for the duplexes.’
Davis refuses to give up on her dream of owning a home; she wants to put down roots and have more control over where she lives.
‘I want to build equity and have a tenant. I want to have a yard. I like being able to control when things are fixed and I want safety. I had a black mold problem in a bathroom that a landlord ignored for three months,’ she said.
Michael Matrisciano, a real estate broker with Compass, has been helping Ramsawak on her search, and said that boomers swooping in with all-cash offers had become an unsettling pattern.
‘This is a trend we’ve been seeing across many markets,’ Matrisciano said.
‘Boomers are coming in with decades of equity from selling their homes, along with retirement savings, inheritances or liquidated stock, allowing them to make all-cash offers that give them a huge edge, especially over Millennials who often rely on financing.’
As a result, Millennials are growing frustrated, because even if they’re qualified to buy, they’re still getting edged out.
‘My advice is to work with an agent who understands how to structure a compelling offer that goes beyond just the price,’ Matrisciano told the Daily Mail.
‘For some sellers, terms may be more important than the number.
‘Flexible closing dates, leaseback options, appraisal gap coverage and, in some cases, waiving inspections — which I don’t recommend — can all make a big difference.’
Compass broker Michael Matrisciano gives his tips for standing out as a buyer
A well-connected agent can also open doors that most buyers don’t even realize exist.
‘Some deals never hit the public market,’ he added.
‘Between private exclusives, upcoming listings, agent-to-agent networks, we can often get buyers into properties before the competition even knows about it.
‘At Compass, we currently have 8,480 private exclusives across the US only available to buyers working with a Compass agent. That kind of access limits competition and gives buyers an edge.’
Most importantly, he said, a good agent knows how to talk to sellers.
‘We can present our buyers’ offers in the best way possible where we position their offer as the safest and cleanest for the seller even if it’s not the highest price.
‘Nuances like that can make the difference between winning and losing a home.’
