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Are Millennials Too Demanding When Buying Their First Home?

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Terry Story, Millennials Too Demanding, Buying Their First Home

With Terry Story, 30-year veteran of Keller Williams Realty in Boca Raton

Steve spoke with Terry Story during this week’s Real Estate Roundup. Terry, real estate agent and 30-year veteran of Keller Williams, discussed the changing trends in home plans, what was once popular, and what styles and trends are dominating the market today.

Open Floor Plans Are On The Way Out

For years, open-floor plans dominated the housing market. People wanted rooms that flowed together, plenty of space, and the ability to easily communicate room-to-room. However, this floor plan seems to be on its way out. This may be at least partly due to the fact that so many company offices are now structured with open floor plans. So, when people come home now, they want to see something different. The days of clean, neat, open spaces where one room flows into the next are fading. Terry, on trend with a growing portion of the U.S. population, wants walls, wants separation between spaces.

A Home On Display

One of the big issues with open floor plans that you may have noticed is the fact that so many things are suddenly put on display. For example, with an open floor plan, your lovely kitchen and the freshly-cooked dinner you’ve just made, are on display the second someone walks in the front door. The bad news? That pile of pots and pans you had to use to make said dinner is ALSO on display! As open-concept plans climbed in popularity, more and more families started to notice that the ease of access and opportunity to show off also fully put the negatives on display.

Privacy

Open floor homes also took the entire concept of privacy and threw it out the window. You may well be interested in going back to the days when a guest walked into your home and couldn’t easily see the intimate details of your life. Open plans mean limited walls and doors, which also means little or no privacy. A straight line of sight between the front door and your kitchen/dining room/living room means everyone gets to see every piece of mail, every unfolded towel, and every dish still sitting in the sink or dish rack.

Interested in watching an adult movie or show? Well, are the kids ANYWHERE in the house?  Then forget about it! With an open floor plan, you have no privacy to watch adult-rated entertainment while kids play in “the next room” because there isn’t really a next room; it’s all just one giant room. Or, if you have any type of work to do or phone call to make that requires the use of adult language or a modicum of privacy, forget about that, too.

Starter Homes

Along with getting choosier about floor plans, there’s also a new trend among millennials: Feeling entitled to skip buying starter homes. Millennials are waiting until later in life to buy their first homes. This means that when they do enter the home-buying market, they have a little more money in their pockets. What that has translated into seems to be shying away from basic, cheaper “starter” homes, and instead, jumping straight into the market of homes with higher price tags. And with interest rates at the lowest they’ve been in months, the option to spend more is more feasible.

But what many of these millennial homebuyers fail to realize—something any veteran homeowner can tell you—is that there are a lot of hidden costs associated with buying and owning a home. Still, if you’ve got the money in your pocket and no kids to worry about, dropping $1 million on a first home might seem reasonable. If you fall into this category, you might be under the mistaken impression that your first home is the home of your dreams and therefore worth a hefty price tag. But the fact is that, no matter how much you spend, first homes rarely turn out to really be your dream home. More often than not, they’re your first big learning experience in home ownership.

Real Estate Survival 101

Finally, one last issue to address: troublesome neighbors. You don’t want to deal with them, and, you certainly don’t want to be one. Regardless of what type of home you have or how much you spend on it, there are going to be laws and rules governing how you live in it, at least to a certain degree. The rule of thumb is to be respectful of your neighbors. This just involves using basic common sense. Like, avoid throwing the kind of parties that are likely to put you in violation of noise ordinances or creating a parking nightmare by having more people over than there is room to park their cars.

While homeowners’ associations do deal with some of these issues, there aren’t enough laws on the books to cover every issue that might come up. If you end up having a complaint that requires the involvement of the police, have as much information about the situation and the parties at fault as you possibly can. Cite examples of offenses and provide photographic evidence when possible. But before you go the confrontation route, try your best to “go along to get along.”

If you’d like more information about any of the things discussed above, or for more from Terry Story, check out Keller Williams or stop by Terry’s personal website – https://www.terrystory.com/.

Disclosure: The opinions expressed are those of the interviewee and not necessarily United Capital.  Interviewee is not a representative of United Capital. Investing involves risk and investors should carefully consider their own investment objectives and never rely on any single chart, graph or marketing piece to make decisions.  Content provided is intended for informational purposes only, is not a recommendation to buy or sell any securities, and should not be considered tax, legal, investment advice. Please contact your tax, legal, financial professional with questions about your specific needs and circumstances.  The information contained herein was obtained from sources believed to be reliable, however their accuracy and completeness cannot be guaranteed. All data are driven from publicly available information and has not been independently verified by United Capital.

Read The Entire Transcript Here

Steve Pomeranz: It’s time for Real Estate Roundup. This is the time every single week we get together with noted real estate agent Terry Story. Terry is a 30-year veteran with Keller Williams located in Boca Raton, Florida. Welcome back to the show, Terry.

Terry Story: Thanks for having me, Steve.

Steve Pomeranz: I want to talk about this subject right here right now.

Terry Story: Okay, which one.

Steve Pomeranz: [LAUGH]

Terry Story: What would that be?

Steve Pomeranz: It’s vital, it’s important, it’s the fact that the open flow plan, may be on the way out. Now, this sounds trivial to you, but, I work in an office with an open floor plan and there’s nobody in this office that likes it.

Terry Story: [LAUGH]

Steve Pomeranz: And I think a lot of people are working in that kind of environment-

Terry Story: Yep.

Steve Pomeranz: And then they’re coming home and now they have these houses that are all open floor plans, and they’re going, no, I don’t want that anymore.

Terry Story: See, I think this is the designers pushing their newest and best floor plans so that everybody that has an open floor concept will not want to put up their walls.

Steve Pomeranz: Oh, yeah.

Terry Story: So you’ve got to follow the money, who’s behind all of these?

Steve Pomeranz: Yeah, it’s like the fashion industry, hang on a second.

Terry Story: Exactly.

Steve Pomeranz: Yeah, okay, that sweater, that’s no longer in, you got to have another color. [LAUGH]

Terry Story: You got to get another one.

Steve Pomeranz: [LAUGH] Okay, go ahead.

Terry Story: Yeah, you know what, it’s so cool, when I go into an open floor plan house and it’s so clean and neat, I’m so impressed.

Steve Pomeranz: Yeah.

Terry Story: And I go to my house and I’m like-

Steve Pomeranz: [LAUGH]

Terry Story: Can you imagine if this was open floor plan? I don’t think so, I like the walls. I like the separation, I like having the kids in one side-

Steve Pomeranz: Yeah.

Terry Story: Well, they’re not kids anymore, but one side of the house and TV, adult movies, shows.

Steve Pomeranz: I mean, they no longer want their kitchen and all the dirty dishes to be on display.

Terry Story: Absolutely, when you open the front door, welcome to my house.

Steve Pomeranz: [LAUGH]

Terry Story: Oh, there’s a pile of dishes.

Steve Pomeranz: And the fact is that parents find it difficult to watch adult TV programs when the kids are running around, the kids have got to go to their rooms, anyway to get them out of there. Or they want to conduct their work in private.

Terry Story: And it’s noisy.

Steve Pomeranz: And it’s noisy.

Terry Story: When it’s you’re all there, it’s too much togetherness.

Steve Pomeranz: In our home office, which is in California…

Terry Story: Right.

Steve Pomeranz: They have an open floor plan but they have installed noise abatement systems in the ceiling.

Terry Story: Okay.

Steve Pomeranz: Like white noise, so it actually works, but they wouldn’t pay for white noise in our office [LAUGH] so we, I don’t know, we’re just mumbling and that accounts for the white noise that we get here. Do I sound really emotionally attached to this issue?

I am, all right, so that is changing, but here’s the thing.

According to this article, the message of open-concept living is so powerful, that to admit that you don’t want to live in a house as open as a soccer field is to reveal something shameful about yourself.

Terry Story: A dirty secret.

Steve Pomeranz: This is a complicated life we live. [LAUGH]

Terry Story: To each his own.

Steve Pomeranz: I know, I know, all right, but again, if I work an open floor plan, I don’t want to come home to an open floor plan.

Terry Story: Right.

Steve Pomeranz: That’s final. Okay, let’s change our topics here. Millennials who have been buying homes later in life than typical, for sale not in their 20s anymore—a lot of them in their early to mid to late 30s—are wanting to skip over the starter home. Are you seeing that?

Terry Story: They are, I think it’s that entitlement, Steve. So they’re waiting longer to get to what they feel they’re entitled to. That’s the only thing I can think of because I don’t understand why if you’re younger and you have a couple of dollars, why you’re not buying a home. But what we’re seeing, I’ve had a couple of them just recently, one put an offer on a million two, another one, 900,000, so the interesting thing from my perspective as an agent, these are first time homebuyers who are reaching. They can afford it because the interest rates are so low.

Steve Pomeranz: Yeah.

Terry Story: But they are not realistic in what they expect the sellers to take care of.

Steve Pomeranz: I wonder if they really understand all of the-

Terry Story: Responsibilities behind it.

Steve Pomeranz: Yeah, all of the hidden costs of owning a home.

Terry Story: I question it.

Steve Pomeranz: It’s not just a mortgage, taxes, and insurance, believe me. Anybody who owns a home knows that.

Terry Story: What I’ve seen is a couple of these people, young professionals stepping into big homes for their first home.

Steve Pomeranz: Yeah, well, a lot of it is double income, no kids.

Terry Story: Right.

Steve Pomeranz: I mean, that gives you a lot of excess income.

Terry Story: Sure.

Steve Pomeranz: So they feel, and economy is extremely good, the problem really could come in from you and me, us old folks who’ve been through these cycles before is that the cycles never, trees don’t grow in the sky, these cycles do cycle.

Terry Story: Right.

Steve Pomeranz: And so what happens when things slow down and you’re saddled with this big mortgage, you really got to kind of account for that.

Terry Story: Right, I guess my fears, like you said, I’d like to know if they really have the foresight to realize can I afford this? I’m doing well right now what will this continue?

Steve Pomeranz: Well, according to this article, half of the millennials surveyed, say they expect their first home to be their dream home, and that’s between the ages of 22 and 37. But it also said that the half of the millennials who were surveyed, only have $2,000 or less saved for a down payment. So I think they’re going to continue dreaming.

Terry Story: Yep, a little bit of a disconnect there.

Steve Pomeranz: Okay, one last question here, this is in the real estate survival guide and here’s the question: quiet house is now party central. What to do? This, of course, takes place in Fort Lauderdale

Terry Story: [LAUGH] Fort Lauderdale.

Steve Pomeranz: We have to thank Gary Singer for this. Question: a neighbor on our quiet street decided to make a hotel out of his four-bedroom home, now we have large groups staying there, making noise at all hours. And parking in front of other people’s house. Is our neighbor allowed to do this.

Terry Story: The answer is no, however, the issue really is the laws having kept up with the changes. So we have all these short-term frontal websites, you know them all.

Steve Pomeranz: Yeah.

Terry Story: And the laws really haven’t been able to handle them. So, you do have a right as a neighbor not to have concern with noise, trash, health issues, safety issues. So if you’ve got this going on, go to your community association, or if you don’t have an association, the city or the local police because those things are not permitted no matter what.

Steve Pomeranz: Right, but here’s a clue, as with any problem of this nature, have as many details as possible to include in your complaint. In other words, get your phone out-

Terry Story: Right.

Steve Pomeranz: Really get in there, not in the house literally, but-

Terry Story: Get your facts, gather everything.

Steve Pomeranz: Exactly, make the case to the police then I think they will end up taking care of that.

Terry Story: Right, is this just the one-time party or is this truly a frat house.

Steve Pomeranz: [LAUGH] The bottom line is that there are zoning rules for these things, but they’re not like, you said, keeping up with current events.

Terry Story: With the changes and trends.

Steve Pomeranz: Yeah, the system is not set up right now for the short-term rentals, that’s number one. But also, self-driving cars which, we’re going to be honest, in the next 5 or 10 years, drones flitting around airports and stadiums.

Terry Story: Yeah, privacy laws.

Steve Pomeranz: Yeah, the law moves slowly. So in this case, complain to your local authorities, whether it be your homeowners or the local city and police, but have enough facts to back it up.

Terry Story: Yep.

Steve Pomeranz: All right.

Terry Story: I agree.

Steve Pomeranz: My guest, as always, Terry, Story, 30-year veteran with Keller Williams, located in Boca Raton. And she can be found at terrystory.com. Thanks, Terry.

Terry Story: Thanks for having me, Steve.