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Puget Sound Real Estate: The Millennials are Coming
According to the National Association of Realtors, Millennials make up about 43% of the current day homebuyer pool. WOW! That’s a lot. Gen X is the next biggest pool of homebuyers at 22%, and overall the median age of today’s first time homebuyer is 35 years old. Fun fact for all the Millennials who argue that home-buying in the 2020s is harder than in any other generation: You’re not wrong, but you’re not THAT right. The median age of a first time homebuyer in 1995 was 33.3 years old (before massive school loans, cell phone bills, and internet and streaming subscriptions were a thing). Today’s median age of a first time homebuyer is higher than ever, but only by about 20 months compared to 30 years ago. Interestingly, for young Millennials who might be jealous at the older Millennials’ ability to buy and get a tax credit during the Great Recession, the median age of a first time homebuyer when rates were low and there were tax credits for buying was only 32.5 years old. In today’s crazy high-rate climate, we’re at 35 years old. So, despite all the noise, there’s actually a very narrow band at which the median age of a first-time homebuyer vacillates.
Ok, so we’ve established that Millennials make up the biggest portion of the homebuying pie even in today’s market. What does that mean for Puget Sound though? Well, it means good things because out of 268 US cities analyzed by the US Census, Seattle and Bellevue ranked third and seventh, respectfully, for attracting new Millennials as a share of its populations. Seattle also ranked in the top three out of all the cities for highest concentration of Millennials overall! Seattle is apparently a Millennial magnet, and growing. 41% of Seattle’s overall population are Millennials.
All this growth of working age residents is translating into massive economic growth as well. Seattle recently posted GDP per capita of $128,316, which is third in the nation behind only San Jose and San Francisco. The growing local tech sector is obviously a big part of this, but manufacturing also plays a big role in the Puget Sound economy. Boeing, the Puget Sound’s largest manufacturer, has had a rough go over the past 5 years, but things are looking up for Big B – Boeing delivered its first 787 Dreamliner to China since 2019 yesterday (12/21). Now I get it, Dreamliners aren’t built in Puget Sound anymore (they’re built in South Carolina), but 737s ARE, and if the ice is starting to thaw on deliveries to China for the 787, fingers are crossed that deliveries for Boeing’s biggest cash cow aren’t far behind. Boeing’s stock price jump of 47% since end of October definitely signals that many believe 737 deliveries aren’t far behind. And at the very least, we now have 60,244 Boeing employees in Washington with a much fatter 401k or brokerage account than they had a couple months ago, which is good for the PNW real estate market.
Take it Home
Rates are lower, but still high; and layoffs continue to make headlines – Flyhomes, Zulilly, and Convoy most recently. The King County unemployment rate has risen from 2.4% in February 2023 to 3.8% as of October’s unemployment report. But as we enjoy the holidays with our family’s these next couple weeks, despite some of the bad news out there, we are blessed with one of the most productive economies in the country, composed of the highest percentage of homebuyers in the country, with more and more home-buying Millennials arriving every day. No one knows what will happen in 2024, but the cornerstones of a solid and stable housing market are an incredible gift to everyone living in Puget Sound.
