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A new poll by PropertyShark reveals that Gen Z is willing to make several sacrifices in order to buy a home:
- Increasing their commutes
- Forgo proximity to nature
- Deny themselves access to parks and pools
However, there are some amenities that today’s youngest homebuyers won’t give up.Verify your new rate (Feb 24th, 2020)
Going without to buy a home
Purchasing a property sometimes requires trade offs. To be able to buy a home, you may have to settle for a smaller design. Perhaps you’ll have to look beyond your desired area. This could result in a longer commute to work. Or you may have to sacrifice more of your savings to afford the down payment.
A recent study shows that first-timers are willing to give up some things but not others in order to buy a home. They’re open to giving up some key amenities in exchange for a place to call their own.
Experts say you should be prepared to forfeit some perks if you’re on a tight budget. Choosing which are most important is a personal decision that will depend on your needs and preferences.
What the data reveal
A new poll by PropertyShark had some interesting findings. When asked what they would (and wouldn’t) be willing to compromise on when buying a home, Gen Z said they are:
- Willing to endure a longer work commute
- Willing to go without a garden, access to parks or a pool, and storage
- Least likely to give up space in their home, citing concerns about being cramped
- Okay with sacrificing a home office, preferring a home gym instead.
Different generations have different priorities. Here they are, from most to least important:
- For Gen Z: (1) location; (2) space; (3) air conditioning; (4) lifestyle amenities; (5) parking space; (6) storage; (7) energy efficiency; (8) proximity to green space; (9) garden; (10) pool.
- Among Gen Y: (1) location; (2) air conditioning; (3) space; (4) storage; (5) energy efficiency; (6) lifestyle amenities; (7) parking space; (8) proximity to green space; (9) garden; (10) pool.
- For Gen X: (1) location; (2) air conditioning; (3) space; (4) energy efficiency; (5) storage; (6) lifestyle amenities; (7) parking space; (8) proximity to green space; (9) garden; (10) pool.
Reading between the research
Eliza Theiss, spokesperson for PropertyShark, says this survey had some important findings.
“Gen X’s and Millennials’ habits and preferences have been analyzed time and again. But Gen Z is an emerging generation that’s just starting to show and know itself. So their responses were interesting to study.”
Theiss notes that Gen Z’s unwillingness to sacrifice space makes sense. “Most of them were raised in larger homes. Many never shared a bedroom before. Plenty are now forced to share living space with rental roommates. They desire more privacy and space in their next home.”
Ralph DiBugnara with Residential Home Funding says he’s not surprised that younger buyers say they’ll put up with a longer commute.
“More people are able to work virtually from home. So they don’t need to worry about commuting. They’re going back to more traditional values of wanting larger homes,” says DiBugnara.
Theiss wasn’t shocked that lifestyle amenities also ranked higher among Gen Z than earlier generations.
“Their love of all things tech and makes sense. Pair that with lifestyles promoted by celebrities, social media influencers and reality TV. With this in mind, it makes sense that Gen Z prizes a home gym over a home office.”
Prepare for compromises
The experts agree: It’s important to be prepared to make concessions in order to buy a home.
“When you buy a home, there are always going to be sacrifices you have to make. We are in a market with more limited homes for sale. Therefore, to find what you like you’ll have to compromise some,” DiBugnara says.
Almost everybody has to part with some things on their home wish list.
“This is required to avoid heartbreak and overspending,” Theiss says. “Is your dream home worth it if you’ll end up spending every cent on it? And is waiting around for the perfect home to appear worth it while other buyers claim good properties you could have shopped?”
Bruce Ailion, Realtor and real estate attorney, says sacrifices are worth it.
“Historically, housing prices have risen. Like a train pulling away, running to jump on becomes more difficult as the train speeds up. Each year that passes results in higher rents,” says Ailion. “That makes saving for a down payment harder. So it usually makes sense to buy a home now rather than wait for the perfect home sometime in the future.”
Besides, Ailion adds: “You can always sell your first home and use the equity built up to purchase a better home later.”
What to let go of
Sacrifices worth making will depend on your personal needs and desires. But if it comes down to saving enough for the down payment, don’t be afraid to tighten the belt.
“Making compromises is part of a successful purchase. That may mean cutting back on cable. You can make coffee at home versus stopping at Starbucks. You can shop at warehouse stores rather than Whole Foods,” suggests Ailion.
In addition, you can consider taking a second job, working overtime, and selling off valuables.
But you may not have to. Many mortgage programs require little or no down payment, and down payment assistance is available to many who are just starting out. In fact, most who are eligible (and income limits are a lot higher than you probably think) don’t even know about these programs.
What to hold onto
The key factor you probably don’t want to compromise on is location.
“A location that’s highly valued by the largest number of people is the key to a profitable investment,” Ailion adds. “The areas to begin making compromises on are size, age, condition and features of the home.”
After all, “improvements can be made to your home any time after your purchase,” says DiBugnara.
Another thing you don’t want to surrender: financial stability.
“Anything that endangers your current or future finances is not worth it. That means not stretching your budget to the max when you buy a home,” recommends Theiss.
In addition, avoid sacrificing in other areas that can prevent your home from appreciating in value.
“This includes a good school district and affordable taxes. Also, it includes easy access to public transportation and nearness to major highways,” DiBugnara adds.Verify your new rate (Feb 24th, 2020)