So, I was reading the paper today (yes, I read a real newspaper every day) and an interesting article caught my attention. The headline stated that Gen Z was staring to buy houses now.
Gen Z is interesting to me. You see, my children and most of my nieces and nephews fall into this category. I’ve heard a lot of experts say that the house buying need would skip the millennial generation until their 30’s.
So, all of this makes me wonder, are we about to double the amount of people that are looking for houses? Are the millennials about to leave their apartments, and the Gen Z kids look for homes in the suburbs? When I look at the last 13 years, and the two major recession‘s that have slowed down the housing market, it looks like we may be in a perfect storm of demand.
I’ve really been watching labor and material cost lately. I believe now more than ever, that replacement cost will drive appraised values of existing homes up even more. It’s simple supply and demand economics if you ask me. What do you think?
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That is already happening in spades in Arizona. To price new listings we look at current sold comps (and they are few and far between) and add 10 to 20% on now scarce sales up to 12 months in arrears, in up to a mile radius. (Normally last six months and .25 miles from subject property.) We list (go active) on a Thursday, run a two day (Sat/Sun) 3 hour open house and accept offers through Monday at 5:00pm. Spreadsheet and review with seller. We then take promising offers and multiple counter highest and best offer. In the three transactions I have three done like this in the last month (2 listed at $599,000 and 1 at $1,725,000.) All have sold and closed $50,000 to $80,000 over asking to a cash buyer who waives appraisal (no need) and any seller responsibility inspection identified repairs, as well as accelerated closing. As building materials and labor costs rise, theses component compound on location/land value. It’s great days top be alive. A