Savvy millennials who used creativity, patience and pandemic saving to buy first homes despite Portland’s ‘crazy’ Real Estate market

PORTLAND-Aubrey MacMillan and Jared Johnson say they were lucky to have found a three-bedroom home they could reach in Portland’s heating housing market. But first -time shoppers in their 20s have more than what they see as good luck.

They are disciplined to save and constantly search for a place that can support them, their small business and their desire to start a family.

They make three solid offers and lose, sometimes with competitors paying the asking price in cash and leaving the need for the seller to repair.

They see these losses not as shortcomings but as plenty of time to save for a larger down payment and to cover closing costs.

Johnson will be temporarily unemployed in 2020, but they will still keep what they can.

They are lucky in some respects. They received three stimulus checks pumping into their accumulation. Their federal student loan payments were stopped and the interest rate was dropped to zero by the CARES Act in March 2020. They are running a monthly payment on their savings.

And they qualify for a mortgage rate of less than 3%, close to a historic low.

“The stars lined up,” said Johnson, 29. “In the end, we shopped for an unsolicited price and below our budget.”

MacMillan, 28, continued, “giving us a chance to make the house our own” with improvements.

Like most of their generation, the couple has been part of the anticipated wave of millennials, born between 1981 and 1996, wanting to end their tenancy.

Making this difficult for all buyers, especially first -timers without home sales, is the rising cost of living on land and the number of Portland homes sold which has fallen to the lowest the -the reported in the 30 -year Regional Multiple List of Services (RMLS).

The median retail price of the Portland metro jumped $ 12,000, about 2.5%, from $ 488,000 in March to $ 500,000 in April, according to the latest RMLS report.

However, real estate broker Kim Parmon of Living Room Realty told MacMillan and Johnson, as he does with all of his clients, that they can succeed if they remain “strategic and creative.”

Parmon advised them to look for online marketplaces like Zillow only for homes that are within their budget and know their standards and have been sold for at least a week.

“Kim told us to look for a home that would last the weekend and there weren’t 25 offers” so sellers are more inclined to negotiate, MacMillan said.

The couple is comfortable not jumping too fast. Renting their rental home runs until May, and it’s the same price to lose the contract or break it. They were given speed rather than a hard date to move.

Another benefit: A friend who lives with them and pays the rental costs is willing to move into the couple’s new home in the Parkrose neighborhood of Northeast Portland and contribute to the loan.

“We didn’t have the most ideal situation to get home, but a lot of places we looked forward to and did it,” MacMillan said, “It’s a lot of financial gymnastics.”

Real estate broker Sophia Rosenberg of Hasson Company Realtors says she uses a variety of levers to help her clients, who are not selling an existing home, compete with people who have income from a home. sold.

Time leaders may provide to compensate for the difference between the sale price and the appraisal amount to satisfy the lender. They can leave repair requests, except for safety issues.

“Letting other agents know we’re not writing to multiple homes at the same time,” is another way to identify a buyer, Rosenberg said.

“I also started offering to donate $ 1,500 to $ 2,000 in my commission to a nonprofit chosen by the seller after a successful conclusion,” he said. “That helped us stand up.”

A recent Zillow report found that even half of real estate agents surveyed representing a home seller said they were given an all-cash deal, an escalation. clause where the potential buyer agrees to win a higher offer, the fee is greater than the standard 20% or a higher deposit.

Listing agents also said they received submissions prior to the offer review date.

Buyers ’agents also try to appeal to landlords by letting them return to their former home until a replacement can be found. More unusual strategies include throwing a pizza party and sending flowers to vendors, according to Zillow.

Millennials buy homes

There are more than 72 million millennials in the U.S., making adults born between 1981 and 1996 the largest generation. As they get older, their priorities will shift from renting urban apartments to a home that offers safety and good schooling, according to Matthew Gardner, chief economist at Windermere Real Estate.

By 2020, millennials represent 18%, or more than 15.2 million, of all homeowners occupied in the country, even if it is not easy for the generation to pay off student loan debt, while saving for down payment and paying rent at the same time, Gardner said.

The trend for millennials buying a home was magnified during the coronavirus disease by their ability to work anywhere online, which “allowed most to consider moving to more remote markets where the home could be cheaper, “he said.

The short inventory, which is pushing up prices, is due to the slow pace of new construction and the fact that owners are no longer operating as much as they used to, according to Gardner.

One in five millennials used money given to them by a family member to help with downpayment, and one in 10 sold stock to raise the funds they needed, according to Gardner, citing the National Association of Realtors ‘2021 Home Buyer & Seller Report.

Many home buyers also saved money as venues were closed during the pandemic by not eating out, traveling and attending concerts and other forms of entertainment.

“My advice to millennials, especially when house prices are growing fast and there is a shortage of homes being sold, is to hang in there,” Gardner said. “And my advice to the builders is to build for this generation, but don’t forget they want a dog shower in their new home.”

‘We keep watching’

MacMillan and Johnson began looking seriously for a home in January. They made offers for properties in Southeast Portland and the Gresham border, but lost out on a much stronger deal.

“We just keep it going, watching, watching,” MacMillan said.

He is a human resources generalist in Hillsboro, he is a simulate technician in the school of nursing at the University of Portland in North Portland. They felt that any location west of their Gresham rental could be an improvement.

Their fourth offer was accepted: The two -story home, built in 2014 with 1,500 square feet of living space and an attached garage, was listed on sale for $ 399,900 in Feb.

They followed Parmon’s advice to wait the weekend and they made a full price offer that was accepted in Feb. 11.

A comparative comparison of the house sold in the same houses concludes that the asking price is on the high end. The sellers, who MacMillan and Johnson said were excited to find a replacement home, dropped the price to $ 20,000, saving the couple about $ 100 a month.

“The house just needed flooring work and we did that right away,” Johnson said. “Now, the house is perfect and if we walk in the first time where it’s our house, it’s made to cause a struggle.”

“We’re lucky in a crazy market,” MacMillan said. “We have friends who are watching and struggling. For us, it’s perseverance, and being in the right place at the right time. ”

They recognize the other aces up their sleeve: They have their finances in order and wise guidance.

“We feel like you need to align yourself with the people who have the most help to help you,” MacMillan said. “Find a good real estate agent and loan officer, and listen to their advice.”

More than luck, he said, “that’s what gives us help.”

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