The features that matter most in a first home, by generation
When we’re young, many of us dream of living like kings and queens of our castle – residing in a big, bountiful, mansionlike home in a coveted community. While that grandiose vision may eventually come to fruition for some, the reality is that the first home we end up buying likely comes with some compromises: perhaps a smaller footprint, fewer amenities, and a neighborhood that may not be our first choice.
Clovered recently conducted a study (details at tinyurl.com/clovered19) to find out what is on the starter home wish list for most. Among the key findings:
The ideal size is 3,320 square feet for millennials, 3,311 for Gen Xers and 2,949 for boomers.
The top three ideal home styles are, in order: modern, ranch and Victorian for millennials; and ranch, modern and Victorian for Gen X and boomers.
The ideal number of bedrooms and bathrooms, respectively, is 4.2 and 3.3 for Gen Y; 4.1 and 3.2 for Gen X; and 3.7 and 3.1 for boomers.
The toprated factors when buying a starter home are affordability (ranked tops by 75.1%), low crime rates (70.5%), proximity to work (45.2%), climate (40.3%) and geography of the area (39.7%).
The most valued starter home features are central A/C (62.7%), private backyard (61.9%), storage (53.5%), ample natural light (50.4%), hardwood floors (39.5%) and separate laundry room (40.3%).
The difference between the perceived acceptable starter home cost and the actual starter home price is highest in Massachusetts (where starter home costs are $86,811 higher than anticipated), Washington ($69,854 higher) and California ($51,689 higher), and lowest in Ohio ($5,928 less than expected), Texas ($3,353 less) and Michigan ($3,171 less).
Janelle Thomas, a real estate agent with Magnolia Properties in Jacksonville, Florida, said most of these findings align with what she sees in the market.
“Today’s starter homes are often a matter of taste and expectation. In many cases, starter homes have evolved into more functional living spaces that have been updated for style as well as the current needs of today’s families,” said Thomas.
Given that starter homes are typically purchased by younger buyers (especially millennials), it’s essential for these home shoppers to set realistic expectations based on what they can afford.
“Most buyers of averagepriced starter homes in my market will not find the central air or private laundry room that they desire,” said Jeremy Zucker, an agent with White Plains, New Yorkbased Keller Williams NY Realty. “I constantly remind buyers that they need to stick to their budget and keep their housing expense at a maximum of 35 percent of their monthly gross income. This is important so that buyers don’t stress out about their upcoming mortgage payment and can ideally save money for other goals, like renovations, retirement, college savings and more.”
Zucker stresses that, instead of wish list amenities like a deckedout kitchen, private backyard or hardwood floors, firsttime buyers should prioritize quality construction and a desirable neighborhood with lowcrime and reliable services.
But if you can afford it, a wellequipped first home that you won’t need to fix up soon after moving can be a smart purchase.
“Many millennials are staying in their starter homes longer and looking for a turnkey residence. They don’t want to be spending their weekends picking out faucets or remodeling their home,” noted Alison Bernstein, president of Suburban Jungle, a New York City real estate firm.
Kyle Wallace, CEO of Wallace Group/keller Williams Realty in Franklin, Tennessee, finds this latter trend troubling.
“Many firsttime buyers aren’t willing to put in the sweat equity like previous generations, often due to a mix of demanding jobs and lack of knowhow with fixerupper projects,” said Wallace.
Consider that, on average, most homeowners remain in their properties for only about seven years, “and that number is even lower for firsttime buyers,” added Wallace. “So firsttimers should not expect or be looking for luxurious amenities and features. And they need to keep timelines in perspective – no purchase is worth being ‘house poor.’”
For these and other reasons, Thomas recommended considering a condominium, townhome, duplex or other residences within a new/newer subdivision as a starter home, if you can afford it.
“Being in a building or subdivision can offer a good start for firsttime owners, and builders often have attractive buying options that buyers may not get with an existing older home,” said Thomas. “This also allows you to live in a community that is required to be wellkept, which will aid in selling quickly when it’s time to move.”