The Millennial Generation, now in their late 20s to early 40s, are entering the housing market in higher numbers than ever before. Just a few years ago, this cohort was derided as forever renters or perpetually living at home with parents, but housing and mortgage statistics today indicate that many Millennials were simply waiting longer than their parents had to buy their first home.
The Millennial home buying process does look different from that of generations before. Listing and mortgage applications have moved online, so younger people can house hunt and secure financing from the comfort of their couch. Millennials are also looking for smaller homes and are more willing than Boomers to take a chance on a fixer-upper. But there are also many Millennial buying trends that mirror that of previous generations, including wanting a home in a safe neighborhood, with good schools, and room to raise a family.
State of the Economy and Millennial Home Buying
When the COVID-19 pandemic hit in 2020, the economic downturn took a toll on younger Americans. According to Pew Research, 52% of adults aged 18-34 are now living with their parents due to economic factors and the Covid-19 pandemic. Student loan debt, sluggish wage increases, and the high cost of rent all played a role.
The pandemic also drastically shifted our relationship to our jobs. Work from home policies eliminated the need to live in city centers. What followed was higher demand for homes in suburban areas and smaller cities. Better Homes and Gardens Real Estate The Masiello Group saw this play out in Northern New England, with an increase in home buyers from urban areas along the Interstate 95 corridor relocating to small towns and cities in Maine and New Hampshire.
As demand in the housing market shifted, so did the demographics of who's buying. Research from Zillow shows that half of all homebuyers in 2021 were under the age of 41 and the median age of home buyer was 36. According to the CoreLogic Loan Application Database, millennials made up 67% of first-time home purchase applications last year.
Despite economic setbacks, Millennials are finding ways to save for a home and are diving into the real estate market.
What Millennials Want in a Home
Surveys of Millennial home buyers show that affordability is the number one factor in buying a home and that they are willing to move to more affordable cities to get what they want. Counter to stereotypes about Millennials and their desire for big cities and apartment living, one survey showed that having a large yard and a quiet neighborhood were the top attributes Millennials are searching for.
Like many generations before, reaching the financial milestone of homeownership is very important to Millennials. According to Realtor.com, two-thirds of Millennials say the desire for homeownership is important.
"Millennials, it turns out, aren't that different from the Americans that came before them," said Chris Masiello, President and CEO of Better Homes and Gardens Real Estate The Masiello Group. "They want that piece of the American dream, and are seizing it, all while facing some challenges that are unique to their generation."
Millennials vs. Boomers
One of the more surprising statistics in Millennial homeownership is that these buyers tend to want smaller homes than older generations. Millennials are having smaller families and may not need the larger homes that were popular in the early 2000s. This generation also tends to be more environmentally conscious and may not want the impact (and expense) of heating and cooling a 2,500-square-foot home. Affordability is also a factor. If Millennials are looking for less expensive homes, smaller may be all that's available in their budget.
These smaller homes are also the same homes many Boomers are looking at when downsizing. One survey found Millennials are searching for a home, on average, that's about 1,700-square-feet in size, while Boomers are looking for a home around 1,900-square-feet.
This exacerbates an already tight inventory supply by up-ending the typical home lifecycle. For generations past, younger homebuyers could depend on a steady supply of new construction along with a number of homes up for sale that were previously occupied by older people now looking to downsize. New construction declined steeply after the Great Recession, greatly reducing inventory today. In addition, the Boomers are either choosing to stay longer in their family homes to age-in-place or are "downsizing" into the very homes Millennials are targeting.
"The lack of inventory, the high demand for those smaller starter homes, and the competition with older generations who have a lifetime of savings and accrued equity makes it very tough for Millennials to get a foothold in the real estate market," said Masiello. "They really need to do their legwork at the beginning of the home buying process to compete."
That work includes securing financing, knowing their budget, and working with a buyer's agent that can quickly notify home buyers when affordable options become available.
Christopher J. Masiello Named in 2022 Swanepoel Power 200
Swanepoel Power 200 (SP200) has recognized Better Homes and Gardens Real Estate The Masiello Group Chairman and CEO, Christopher J. Masiello, as one of the most influential residential real estate industry leaders. He joins the ranks of influencers from some of the most powerful companies in the industry.
Chris oversees 1000 agents, employees, and affiliates spanning Vermont, New Hampshire, Maine, and Massachusetts. In addition to Better Homes and Gardens, Chris leads affiliated businesses Great East Title, SVN Commercial, and the Real Estate Institute of New England. Together they make up The Masiello Group, which has been the region's leader offering a full range of services to brokers, sales associates, and home buyers and sellers. It is the only company in the area to provide home services, including mortgage, title, home warranty, homeowner insurance, and relocation services under one roof.
"I'm honored to be listed among some of the most accomplished executives on the Swanepoel Power 200," Masiello said. "but this award speaks more to our team and their unwavering efforts to deliver the best possible service to our agents and our clients. What our team does, day in and day out, is inspiring. I proudly share this recognition with our entire Masiello organization."
Also included in the SP200 are Better Homes and Gardens Real Estate President Sherry Chris and Mark Woodroof, the Managing Partner of Better Homes and Gardens Real Estate Gary Greene based in Houston, Texas.
Released annually in January, the Swanepoel Power 200 ranks the most powerful and influential executives in the residential real estate industry for the preceding year. The ranking is widely acknowledged as the highest recognition an industry leader and executive can receive.
View the complete Swanepoel Power 200 rankings for 2022.
As we approach the end of 2021, the biggest real estate headline for the year is clearly the rapid rise of home prices. The rise that began in 2020 in the early months of the COVID-19 pandemic has continued through 2021, as people seek more space and a slower pace in smaller cities, suburban towns, and rural areas across Northern New England. The combination of high demand, tight inventory, and low-interest rates pushed prices higher not only in traditionally hot markets but also spurred a rapid rise in outlying communities that had traditionally been affordable enclaves for young families and new home buyers.
At Better Homes and Gardens Real Estate The Masiello Group, we saw an extremely competitive real estate market emerge in 2021. The inventory levels went from a six-month supply to a one-month supply over the course of the year. In addition, the number of homes that sold at or above asking prices spiked as well.
This climate went far beyond what we in the real estate business call a "seller's market"; home buyers from away were placing offers sight unseen, home sellers were struggling to find their next home within their budgets, and new home buyers were often sidelined with few affordable options available in their desired locations.
Despite the upheaval of 2021, there are signs that 2022 will offer more options for homebuyers in Northern New England. More homeowners are indicating they want to sell and are likely to do so earlier in the year. Projected interest rate increases and added inventory may stabilize prices in certain areas. It is yet to be seen how the pandemic will continue to affect the market and draw people from other regions who were considering relocation to Northern New England.
The Better Homes and Gardens The Masiello Group 2022 Real Estate Market Outlook for Northern New England seeks to put in context the factors at play and highlight market trends the Masiello team sees emerging for 2022.
Where the Market Stands in 2021
Throughout 2021, median home prices rose throughout Maine and New Hampshire, and these homes are selling quickly. In New Hampshire, days on the market steadily declined statewide, from 40 days in the first quarter of 2021 to just 19 in the third quarter. In Maine, homes were selling quickly as well, and fewer were available to buy. In October 2021, for example, Maine had a 1.8-month supply of homes, compared to a 4.5-month supply in pre-COVID 2019.
While sales were down slightly year-over-year at the end of 2021 compared to the previous year, early data from all of 2021 indicate that total sales for both Maine and New Hampshire will be higher than 2020.
This aligns with national trends, according to the National Association of Realtors. Homes listed between July 2020 and June 2021 typically sold within a week, which was a record low. These homes are also typically sold at or above the asking price. For those which sold above asking price, the median price was $85,000 more than the purchase price.
The hottest markets in New Hampshire continued to be in and around Manchester, NH, and along the New Hampshire Seacoast, with a statewide median single-family home price of $400,000 at the end of November, according to the New Hampshire Association of Realtors. In Maine, the hottest markets center around high-population centers of York County, Portland, Augusta, and Bangor, Maine, with a statewide median cost for a single-family home coming in at $308,000 in October. Agents reported that low inventory and increased demand expanded into suburban and rural areas in both states, from lakeside towns in New Hampshire to farming communities in Maine.
So, where are these buyers coming from? While there is always demand-driven by people moving within Northern New England, demand has increased as people from other parts of the country move to the region.
"People from the New York metro area and the West Coast are opting to relocate to here, where home prices are comparatively lower," said Chris Masiello, President, and CEO of the Masiello Group. "Homebuyers from these regions can find larger homes, with bigger yards and great communities with closer access to outdoor amenities."
Masiello Group, real estate agents, have seen an increase in home buyers from major Eastern Seaboard locales like Connecticut, New York, New Jersey, and Washington, DC. There was also an increase in the number of people from sunbelt regions like Florida and Arizona and expensive West Coast cities like Seattle and San Francisco.
Buyer data collected by the Masiello Group's 35 real estate offices throughout Northern New England found that 30% of people who bought homes in New Hampshire and Maine during the latter half of 2020 came from outside Northern New England.
The Role of Interest Rates in 2022
Much of the high volume of activity has been spurred by historically low-interest rates. Throughout 2021, mortgage rates stayed within half a percentage point, hovering around 3%.
In November this year, the average 30-year fixed mortgage rate dropped by 0.11% to 2.98%, the first time it fell below 3% in over a month, according to a Freddie Mac's rate survey. Although the Federal Reserve has indicated a rate increase may be likely in 2022 to stabilize rising inflation, rates continue to stay low at the close of 2021.
Low Interests Rates and Inflation
The Fed is taking a harder line against inflation after consumer prices in November jumped 6.8% from a year ago, largely due to market forces brought about because of the pandemic. How important it is to address inflation will be debated in the coming months. Regardless of the causes, the rising inflation rate is something professionals in the real estate industry must take seriously, especially in terms of how the Federal Reserve acts.
But what does this mean for the real estate market and home prices?
The threat of rising interest rates often gives home buyers a sense of urgency to lock in a low rate while they can, potentially saving them thousands of dollars over the life of the loan. However, the region's low inventory could dampen any push from home buyers to purchase sooner rather than later.
"At the end of 2021, we saw a lot of home buyers who were actively looking in the early fall decide to sit back and wait," said Masiello. "They're looking for the just-right home and are willing to risk a slightly higher interest rate to wait for more homes to go on the market."
More Sellers Expected in 2022
That risk is likely to pay off, said Masiello. According to a survey of prospective sellers conducted by Realtor.com, the number of people saying they planned to sell their home in 2021 was up 10% compared to the same survey conducted in the spring. Of those who said they were planning to sell, 65% said they wanted to do so in the first half of the year, and 19% of prospective sellers said they had already listed their home.
"This tells us that people aren't waiting for the traditional spring selling season to list," said Masiello. "They see the high demand and higher interest rates on the horizon and want to seize the opportunity to sell in a seller's market now."
So, what does this mean for home prices? It will likely depend on where you are, said Masiello.
"The places that have been competitive during the pandemic will likely remain so," said Masiello. "Portland, Manchester, the New Hampshire and Maine seacoast towns within a reasonable drive to Boston—those are going to be high-demand areas for quite some time."
But suppose additional inventory materializes in rural New Hampshire and Maine, or in those communities just outside the reliably competitive markets. In that case, prices in those areas are likely to stabilize, he said.
Another Housing Bubble?
Those who remember the 2008 housing bubble and subsequent market crash are right to be wary of the rapid rise in housing prices. There is a similar sense of urgency to sell while the market is hot or to buy before prices go up further. However, there are significant differences between 2008 and today.
First is the near elimination of subprime mortgages. In the 2000s, these loans proved extremely risky, not only for homeowners but also for Wall Street investors. Financial reforms in the wake of the Great Recession and a greater understanding of the risks of subprime lending have resulted in a more stable home lending environment.
Another factor is real pent-up demand. Millennials, or those between the ages of 25 and 40, delayed home buying because of financial instability in the 2010s in the aftermath of the 2008 market crash. Now those who can afford to buy are looking for their first home, yet there are fewer available to them compared to previous generations because of the sluggish growth of single-family homes.
According to the U.S. Census Bureau, the ratio of new population growth to home construction was about 2:1 prior to the Great Recession, meaning two people were added to the population for every new home built. After 2007, home construction dropped, bringing the ratio of population growth to new home construction to 5:1. In 2011, the U.S. saw the lowest number of new homes built in the past two decades, with 483,000 new homes built that year. New home construction has dropped 50% in the Northeast since 2010.
One key factor that's gone largely unnoticed is the passage of generational wealth from Baby Boomers to Millennials. A survey by IG Wealth Management and Pollara of high-net-worth parents in Canada found that many are gifting their children the money to purchase a new home, with the average gift at about $145,000.
There are an estimated 20 million similar high-net-worth residents with an average age of 62 years old. Assuming these parents are as generous as their Canadian counterparts, the passage of wealth from one generation to the next to buy a home is not an insignificant factor in today's competitive market.
With the combination of pent-up demand, Millennials with the means to buy, lack of new home construction, and more secure lending practices, it's unlikely we're experiencing a housing bubble.
Home Buying in 2022
The COVID-19 pandemic has changed the real estate market in so many ways beyond the increase in demand and prices; virtual showings, masked open houses, and more sales closed sight unseen. It has also changed the region's conversation about housing, with more discussion surrounding the need for affordable housing, workforce housing, rental units, and less restrictive zoning. We will be monitoring those policy discussions on the local and state levels to understand better how housing policy changes might help more families realize the dream of homeownership.
With 35 offices across the region, our agency has access to on-the-ground insights across Northern New England. As the effects of the pandemic and the high housing demand continue to unfold in 2022, the Masiello Group will be available to share data and insights with those in the business community and the media.
MEREDITH, N.H., Dec. 14, 2021 -- Better Homes and Gardens Real Estate The Masiello Group is pleased to announce the addition of Erin McLaughlin as Sales Director for the Meredith office. McLaughlin brings extensive knowledge of the New England real estate market and proven experience managing and supporting agents.
"We are very excited to welcome Erin to the Masiello family," said Sarah Kelley Ford, Director of Career Development. "She comes to us with valuable experience in coaching and training specifically in the real estate industry. Erin has a wealth of knowledge and experience in facilitating agents and in helping them reach their fullest potential."
Before coming to The Masiello Group, McLaughlin was an active REALTOR and a Productivity Coach at Keller Williams. She has a background in education, with a master's degree in education from New York University and previous experience working in the Manchester School District. McLaughlin has also served as a Certified Facilitator in Fierce Conversations, a Growth Partner real estate coach at The Locker Room, and a Founding Chapter Leader in the Concord New Hampshire Women's Business League.
The Masiello Group Meredith Office, located at 54 NH Route 25 Suite 54E in downtown Meredith, serves clients in the Lakes Region and throughout Central New Hampshire. The office opened in October and connects the entire New Hampshire Lakes Region to The Masiello Group's wider presence in the New England real estate market. The Masiello Group now has 35 offices in Northern New England, spanning from Downeast Maine to New Hampshire's border with Vermont.
MEREDITH, NH (October, 26, 2021) -- Better Homes and Gardens Real Estate The Masiello Group is expanding its reach into the New Hampshire Lakes Region by opening a new office in Meredith.
The office, located at 54 NH Route 25, Suite 54E in the Hannaford Plaza in downtown Meredith, directly across from Lake Winnipesaukee, is the agency's first office in the region. This expansion will connect the entire New Hampshire Lakes Region to The Masiello Group's wide presence in the New England real estate market. The Masiello Group now has 35 offices in Northern New England, spanning from Downeast Maine through New Hampshire and into Vermont.
"We found we were doing more and more business in the Lakes Region and wanted to support our agents, and better serve our clients, by opening a full-service office in the area," said Sarah Kelley Ford, the interim Sales Director for the Meredith office. "The Meredith office will serve as a hub for a number of agents already working throughout the lakes region."
Growth in Rural Markets
The new office in Meredith is a direct response to the recent urban migration trend that's brought numerous homebuyers from out-of-state to Northern New England. The past two years have seen continued interest and increased housing prices in the New Hampshire and Maine real estate markets, partially driven by people moving from other parts of the country to the region. In addition, Meredith and the entire Lakes Region has long been a popular location for vacation and second-home buyers, thanks to its easy access to the major cities of the Northeast and its history of strong home price growth.
With the increased prevalence of remote work, buyers can now work out-of-office at a second home for long periods of time. Others are relocating altogether from larger cities to suburban and rural areas that offer natural beauty, ample opportunities for outdoor recreation, and access to amenities. According to data from the Atlas moving company, roughly two-thirds of the moves in New Hampshire and Maine in 2020 were people migrating into the two states from elsewhere.
"The new Meredith office allows us to increase the company's home listing portfolio and better meet the needs of clients looking to relocate into more rural areas that can provide a higher quality of living," said Ford.
BANGOR, Maine (October 13, 2021) -- Better Homes and Gardens Real Estate The Masiello Group and Great East Title recently joined forces to raise $10,685 for Sarah's House of Maine at annual Sarah's House Yard Sale.
The event, which has raised more than $63,000 over the past nine years, supports an organization that provides rural cancer patients with a comfortable home away from home while undergoing treatment at the Lafayette Cancer Center in Brewer. This year celebrated the return of the popular yard sale after it was canceled in 2020 due to the COVID-19 pandemic. Hundreds of people turned out to shop on Saturday, August 21, browsing thousands of items such as furniture, clothing, household items, antiques, sporting goods, and more.
The event, and Sarah's House, honor the memory of Sarah Lunette Robinson, who died in 2011 at the age of 26 from brain cancer. While undergoing treatment, Sarah met other people who were traveling up to five hours to receive their life-saving treatments. She saw that the lengthy and frequent travel was putting a strain, both mentally and physically, on these fellow cancer patients, so she invited them into her own home to provide them a place to stay on treatment days.
This is how Sarah's House of Maine began. It later grew into its own 9-room facility in Holden that has provided many people over the years with a supportive, and affordable place to stay.
Sarah, who was a real estate agent with Town & Country Realtors in Bangor, now a Better Home and Gardens Real Estate The Masiello Group company, was a beloved member of the community. Great East Title and The Masiello Group family have close ties to the organization. Not only was Sarah once an agent, but Director Delores Landry was an agent as well, and others were friends and co-workers of Sarah's as well. The close connection, and the immediate need for its services, inspired the two companies to support Sarah's House of Maine and keep Sarah's memory alive.
"Sarah was such a wonderful person and a vibrant part of our community," said Kasey Levesque, of Great East Title and organizer of the yard sale. "This event has been a great way to bring together those of us who knew and loved her, as well as do something that just came naturally to her--supporting people in a time of need."
This year's yard sale proceeds were donated in honor of Landry's late mother, Priscilla A. "Pat" Rollins, who died of cancer in September and was a volunteer for Sarah's House. Rollins helped with bookkeeping, cleaning rooms and laundry, donating more than 1,200 hours of service. In 2019, Rollins was honored with the Amanda Dempsey Award for volunteering, which recognized her dedication to Sarah's House and the patients staying there.
Sarah's House provides not only an affordable place to stay but also a supportive and caring atmosphere centered around hope and healing. Referred guests are served with integrity and respect and without regard to financial resources. Anyone who is receiving treatment at the Lafayette Cancer Center and lives more than 30 miles away can stay at Sarah's House of Maine. The organization suggests a donation of $15 a night for the stay, however, assistance is available. For those who might have difficulty obtaining transportation, Sarah's House offers a van shuttle to the center, which was generously donated by Darling's of Bangor. To make a donation online, go to www.sarahshouseofmaine.org.
BAR HARBOR, Maine -- Better Homes and Gardens Real Estate The Masiello Group and Acadia Realty Group will join forces on July 1 as part of an acquisition agreement. The agreement strengthens the ability for both groups to serve Hancock and Washington county with a united team of experienced agents.
The Masiello Group has 33 offices in Northern New England, including Ellsworth, Maine. With offices in Ellsworth and Bar Harbor, Maine, Acadia Realty Group brings its roughly 30 experienced agents to The Masiello Group team. In addition, The Masiello Group Ellsworth office will move to the Acadia Ellsworth office, more than doubling the number of agents The Masiello Group has in the Acadia area.
"With the Maine market at a 40 year high and interest in Mount Desert Island stronger than ever, the timing of this move could not be better," said Steve Shelton, principal of Acadia Realty Group. "Our agency and agents have earned an excellent reputation over the years. Joining The Masiello Group, strengthens our ability to serve our communities."
The Acadia Realty Group and Better Homes and Gardens Real Estate The Masiello Group are known for their service and knowledge of the local real estate market. Each has experienced, knowledgeable agents who go above the industry's standard of care with each client.
"I am excited to be able to join forces with such a talented team of agents," said Chris Masiello, CEO and President of Better Homes and Gardens Real Estate The Masiello Group. "Acadia is one of the most exciting and popular corners of Maine. Our two agencies have a lot of synergies and aligned core values. Combining our two teams of professionals who know the communities and the local market so well strengthens our commitment to servicing our customers."
The acquisition comes when real estate sales are strong, and home prices are on the rise in the Down East Region. In Hancock County, where Ellsworth and Bar Harbor are located, the number of single-family home sales in April increased nearly 70% over the same month the previous year. The median home sale price rose to $278,500, a 21% increase over April 2021. Because the housing market is so competitive, joining these two reputable agencies and their large fleet of agents will offer continued quality service to native Mainers, and those from out-of-state who want to live the way life should be.
[Peterborough, NH, May 28, 2021] - Better Homes and Gardens Real Estate The Masiello Group announced that Cindra Zingaro has joined the company's Peterborough offices as a realtor. Zingaro brings with her over 35 years of real estate experience and expert knowledge of the Monadnock region.
Having relocated to the Northeast in 1985 from Dallas, Texas, Zingaro understands how difficult and demanding a significant move can be and can expertly help her clients navigate the home buying and selling landscape. "I have been watching Cindra work on behalf of her clients for years. She has a proven commitment to helping clients accomplish their real estate goals. We are very fortunate to have Cindra join our team," says Cathy Cambal-Hayward, Sales Director for the Peterborough office.
Zingaro adds, "I am excited to join the Better Homes family. The access I now have to state-of-the-art technology, expert team collaboration, and superior marketing materials only elevate my ability to help my clients seamlessly and effectively "close the sale!" Cindra understands the values and lifestyle that the Monadnock Region yields its residents. When she is not assisting her clients, you will often find her exploring all the outdoor activities the area offers, including kayaking, snowshoeing, and golfing. Cindra lives in the Monadnock Region with her husband and has three adult children and two grandchildren.
About Better Homes and Gardens Real Estate The Masiello Group
Better Homes and Gardens Real Estate is the only lifestyle brand in Real Estate – bringing generations of expertise for all things related to the home into the local marketplace. The Masiello Group, a trailblazer in New England Real Estate since 1966, has 33 offices throughout New Hampshire, Maine, and Vermont — The Masiello Group is the largest real estate company north of Boston and offers complementary home services including mortgage, title, home warranty, homeowner's insurance, and relocation. Visit www.masiello.com to learn more.