Younger buyers could be the key to housing recovery in Boston
The economic outlook in the United States has begun to improve consumer confidence, which may help spark the declining housing market. In New England, the region's real estate agents finally mention a fragile recovery is taking place, the Federal Reserve said in its latest Beige Book. However, many indicators have yet to materialize.
The Fed said real estate in Boston and other areas are showing positive signs, but fragility still makes it difficult to make any aggressive predictions about the future.
"In particular, with sales gains fairly well-established, their concerns focus on the possibility of further price declines," the central bank said, according to the Boston Herald. However, the source went on to say declining inventory levels and increasing demand in greater Boston put significant pressure on prices, which may drive sales up in the coming months.
In some instances, certain demographics could be holding back the housing market in Boston and the New England region. With interest rates at historic lows and home values below average in most neighborhoods, purchasing property is more affordable than ever, but buyers aren't convinced - especially young adults.
According to The Boston Globe, the number of 25-to-34-year-olds owning homes in Massachusetts plunged 20 percent between 2005 and 2010. In fact, the audience segment fell more than any other age group, which raises the question - what is preventing younger buyers from investing in properties?
The answer could very well be high unemployment rates, student debts and tight credit conditions. Therefore, before the housing market recovers in all aspects, the financial stability of younger buyers needs to improve, which will only come with continued job growth and student debt relief.
"That younger generation has a special role to play in driving the growth in demand," Michael Goodman, a professor of public policy at the University of Massachusetts Dartmouth, said to the Boston Globe. "Fewer interested and eligible buyers is not a good sign."
The strength of the housing recovery may depend on younger buyers, especially in the Greater Boston area. When first-time investors feel confident enough to submit bids on homes, it may be easier for a significant recovery to take shape. When looking at the homes for sale in Boston, buyers may want to consider if the house they like most is one they can grow into over a longer period of time. Buying a property that provides resources to raise a family may be just what younger buyers look for when they enter the marketplace.