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Millennials put their spin on homebuying process, with an eye on affordability, convenience

Kaitlin Wojnar, 27, took advantage of first-time homebuying incentives in the city to purchase her home in the Barclay neighborhood.
Kaitlin Wojnar, 27, took advantage of first-time homebuying incentives in the city to purchase her home in the Barclay neighborhood. (Barbara Haddock Taylor / Baltimore Sun)

For the past decade or so, the big story about the millennial generation's approach to real estate has been one of inaction — of kids graduating from college, saddled with debt, and moving back into their parents' basements.

But in recent years, that narrative has changed. According to the National Association of Realtors, millennials — defined as Americans age 18 to 35 — made up 35 percent of the country's homebuyers in 2015. In 2013, the first year NAR measured homebuying among millennials, they comprised 28 percent of all homebuyers. As the members of the generation age, they are dipping more frequently into the market, with an eye on convenience and affordability.

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The fall ad campaign by Live Baltimore, a non-profit that helps promote city neighborhoods and connect homebuyers with incentives, is part of a larger push to sell Baltimore to Washingtonians.

"The median age of a millennial homebuyer is 30 years old, which typically is the time in life where one settles down to marry and raise a family," said Lawrence Yun, NAR chief economist. "Even if an urban setting is where they'd like to buy their first home, the need for more space at an affordable price is for the most part pushing their search further out."

NAR's most recent research revealed that nationally, just over half of homebuying millennials buy in suburban settings, spending an average of $187,400 on their homes. In the region including Baltimore City and parts of Baltimore County, the median home price was $233,500 in the fourth quarter of 2015 — just slightly higher than the national average of $220,000 and a relatively low figure compared to other cities in the Mid-Atlantic. This price range positions Baltimore as a promising market for younger buyers.

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Millennial buyers' search for affordability in the city often means they're gravitating toward lesser-known neighborhoods, said Steven Gondol, executive director of the nonprofit Live Baltimore.

"They are ... going for the 'one-over' neighborhoods — lesser known, but really quality, affordable neighborhoods," he said. "It's often that they've pieced together that they want to be in the city and they want to make a good investment."

For Kaitlin Wojnar, 27, that meant choosing a home in Barclay, which is centrally located but more affordable than nearby locations like Mount Vernon or Charles Village.

Wojnar decided to buy a home when the lease expired on the apartment she was renting with a friend. Her roommate was moving out of town and, after doing some research online about first-time homebuyer incentives in the city, she decided to jump into home ownership instead of renting on her own.

"There are so many incentives out there," she said. "I got over $12,000 in grant money to put towards a down payment and closing costs for the house. Some of that is a loan that will be forgiven in five years. ... With the incentives, I was able to get this property without completely depleting my safety net."

Kaitlin Wojnar, with her dog, Essie, bought a home in Barclay, which is centrally located but more affordable than nearby locations like Mount Vernon or Charles Village
Kaitlin Wojnar, with her dog, Essie, bought a home in Barclay, which is centrally located but more affordable than nearby locations like Mount Vernon or Charles Village (Barbara Haddock Taylor / Baltimore Sun)

Gondol says prices and areas with "equity to be built" are driving millennials to buy in neighborhoods adjacent to the more traditionally popular areas. For example, in Medfield, the median price is around $150,000, while in nearby Hampden, it's closer to $200,000.

"They're not fooled by 'brand,' thinking, 'I have to be in Hampden.' They say, 'What the heck, I'm in Medfield, I can walk there," he said.

Earlier this year, Nick Williams, 31, bought a home located just north of Canton in the Patterson Park neighborhood — a spot that Gondol says is popular with young buyers looking for affordable homes near Canton's social scene.

Williams wasn't as familiar with Patterson Park as he was with other neighborhoods in the city, so he set out to do some research, both online and in person — and he liked what he discovered. "When I walked around Patterson Park, and even on their Facebook page, everyone was super nice. It's a real community," he says.

When choosing neighborhoods, millennials put a premium on convenience; they are looking for easy commutes and access to parking. Wojnar works in Washington, so she focused her home search on southern neighborhoods with access to Interstate 95, as well as spots close to a train station. From her home in Barclay, she now commutes to D.C. by train several days a week.

"The majority want to be close to where the action is, in downtown, urban areas," says Donnell Spivey, owner of EXIT Spivey Professional Realty in Ellicott City. "Even if it's out of the city — like Columbia, for example. They want to be within walking distance for restaurants, bars, theaters, grocery stores. They look for convenience."

In the house itself, convenience translates into being move-in ready. Wes Peters, a Realtor with Keller Williams Realty, says his millennial clients looking for homes in Baltimore county are usually interested in houses under $350,000, and they want them fully rehabbed.

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They're not fooled by 'brand,' thinking, 'I have to be in Hampden.' They say, 'What the heck, I'm in Medfield, I can walk there.


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Tyler Banks, founder and CEO of Charm City Builders, has observed the same phenomenon. His company buys and renovates homes in Baltimore, including the home Williams purchased.

"They want a house that's move-in ready, with the washer and dryer included. Most times, they're coming from a rental situation, so they don't have a lot of stuff," Banks says. "They want the house to be move-in ready without having to do anything. They don't want to lift a finger."

Williams, like many other millennials, saw investment potential in buying his home. According to NAR, 84 percent of millennials consider home purchases a good financial investment. When buying, they want to know the home will hold its value, and some think in terms of turning their homes into viable rental properties

"I'd like this to be a rental home for me," Williams says. "It's not a long-term plan for me to live there forever, but I plan to own it forever."

Jamie Norwood, 31, and his husband, Joe Gutberlet, 36, haven't decided how long they will stay in their Rodgers Forge rowhome, they did consider its long-term value before buying it this year.

"With this house, we knew it was an investment," says Norwood. "Everything in the neighborhood was a consistent value. I was making sure, because of the fear of ending up upside down."

Long-term value was a big factor for Jamie Norwood, right, and his husband, Joe Gutberlet, when they purchased their Rodgers Forge rowhome.
Long-term value was a big factor for Jamie Norwood, right, and his husband, Joe Gutberlet, when they purchased their Rodgers Forge rowhome. (Kenneth K. Lam / Baltimore Sun)

Norwood speculates that his generation, having seen the impact of the real estate market bubble burst in 2007 and 2008, is likely to be careful when it comes to real estate deals.

"Risk aversion is part of it, after seeing the market tank," he says. "I think a lot of people are less willing to jump into a 'great deal.' The idea of foreclosure and a process like that was something we didn't want."

From the earliest stages of home buying, millennials are relying heavily on technology to research markets and homes before heading out to look at anything in person.

"I was on the Zillow app constantly," Wojnar says of the online real estate database that allows users to view home listings.

According to NAR, 93 percent of millennial homebuyers use the Internet and 71 percent use mobile applications to research home purchases, compared to 92 percent and 64 percent of Gen X'ers and 84 percent and 38 percent of buyers in their sixties.

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"Buyers are more savvy when it comes to understanding the market and what's available to them because of the way they search different real estate sites," Banks says. "They really do their homework when it comes to investigating properties."

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Though millennials aren't afraid to get started on their own, they still rely on outside resources like realtors — in 2015, 87 percent of homebuying millennials worked with one.

Marybeth Camerer, a Coldwell Banker agent based in Towson, says the preliminary research done by millennials provides a great base upon which realtors can build. "The buyers I've found are very open to learning about market forces and the process," she says. "They ask a lot of questions and want to understand the contracts. They ask smart, good questions because they've had the time to begin to educate themselves."

Wojnar worked with Live Baltimore, a realtor and a mortgage broker to explore as many incentive avenues as possible before making her decision, and to be sure she understood how the process would work.

"It's not something you learn in school," she says. "I'm the first one of my friends to buy a house, so I'm getting a lot of questions."

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