1471 McAllister

Millennials – Listen Up – Go To College – Buy A House

A College Degree is Key for Millennial Homeownership in the San Francisco Bay Area, say my friends at Trulia. They just shared this with me (after a few edits to my liking), so I’m sharing it with you.

To go to college, or not? This is one question many millennials ask themselves. For households between 25 – 30 years of age who want to live in California’s major metros the answer is GO! A recent Trulia study found, it takes almost 20 years for degreed millennials to save the 20% down payment in San Jose, Los Angeles, Orange County and San Diego. For millennials without a degree, they need to save for decades. In San Jose, the amount of time is 45 years.

The landscape in San Francisco is daunting even with a degree. It takes a whopping 29.5 years with a degree and without it is 50+ years.

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Where Saving For a 20% Down Payment Takes Decades

With College Degree Without a College Degree
# U.S. Metro Years Needed to Save for Down Payment Required Down Payment at time of purchase U.S. Metro Years Needed to Save for Down Payment Required Down Payment at time of purchase
1 San Francisco, CA 29.4 $560,590 San Francisco, CA Not Possible N/A
2 Los Angeles, CA 18.8 $196,616 San Jose, CA 45.4 $665,508
3 Orange County, CA 18.5 $235,959 Los Angeles, CA 39.9 $353,270
4 San Diego, CA 17.7 $192,081 Orange County, CA 32.3 $347,842
5 San Jose, CA 17.7 $289,072 San Diego, CA 29.0 $262,589
6 Honolulu, HI 16.0 $165,588 Oakland, CA 27.3 $267,605
7 Oakland, CA 15.6 $193,453 Ventura County, CA 22.9 $230,929
8 Ventura County, CA 15.5 $189,325 New York, NY 20.2 $149,905
9 Denver, CO 14.3 $125,314 Fairfield County, CT 20.1 $185,494
10 Cape CoralFort Myers, FL 13.3 $74,130 Honolulu, HI 18.0 $173,574

In the study of 250 major metropolitan areas California swept the top 5 spots for number of years to save for a 20% down payment (Honolulu, HI was 6th, Oakland was 7th & Ventura County was 8th).

San Francisco tops the list, requiring 29.4 years with a college degree and 50+ years without it. Los Angeles comes in second, requiring 18.8 years with a college degree and 39.9 years without. San Jose and San Diego are not far behind, requiring 17.7 years with a college degree, but it takes much longer without a college degree for San Jose (45.4 years) than San Diego (29 years). The numbers for Orange County is 18.5 years with a college degree and 32.3 without.
Source: http://www.trulia.com/trends/2015/07/millennial-down-payment

What are Bay Area millennials to do? Consider a 10% down payment. Saving for the down payment can be done in less than half the time. How is this possible? Because price appreciation outpaces income growth for this group. Millennials without a college degree in San Francisco will actually be able to save a 10% down payment in 28.5 years, compared to not being able to save for a 20% down payment ever. San Francisco millennials with college degrees are able to attain a 10% down payment in 13.7 years, compared to 29.4 years for a 20% down payment.

In other Bay Area metros, the time to save for a down payment is significantly less as well. The time plummets from 45.4 years to just 15.4 years for San Jose millennials without a degree and with a degree it drops from 17.7 to 9.3 years. In Oakland, millennials without a degree the time needed to save goes from 27.3 to 11.3 years and with a degree it drops from 15.6 to 8.8 years.

In summary, a degree will get Bay Area millennials into a home by their forties if they opt for a 20% down payment. By choosing a 10% down payment both the degreed and non-degreed can enjoy the benefits of homeownership considerably sooner.

When you are ready to buy, browse Trulia all you want for the perfect home, but hire a professional, like me, to help you win.

Zillow Acquires Trulia: Wake Up Brokers! They’re Getting Rich At Your Expense

If you haven’t heard about listing syndicator site Zillow acquiring competitor site Trulia for $3.5 Billion in stock, I feel for you…especially if you’re in real estate. Since this announcement, I’ve received a couple emails, seen a few comments, read a few newsletters, and thought I’d try to spark a dialogue here on the site.

For what it’s worth, I’m definitely not thrilled about these two companies continually capitalizing off of our data. I certainly feel they would be nothing without the brokerage community, and firmly believe real estate brokers and agents got it all wrong (especially bowing down and “claiming” our own listings on these sites…for a fee!), but who am I to judge. I want to hear what you have to say. To start the conversation, have a look at what a reader said recently in a past post we had done about how worthless Zestimates are: “Zillow Zetimates Rubbing You Wrong Too? Vent”:

Why hasn’t anyone considered starting an “Agent Owned” National CMLS Internet advertising company by which we all become coop owners and share in the ad revenues and use the service at moderately low cost. We could put a stop to all the internet companies using OUR LISTINGS to make BILLIONS and use those revenues as retirement supplements to all the coop members of the National CMLS internet company. I am sick and tired of Zillow, Trulia, Realtor.com, and other sites using our listings to milk the real estate agents for money that belongs to us. These are our listings not theirs. If anyone should make money on our listings it should be us. We can put a stop to this and no longer allow these sites to use our listings. In the very least, they should be paying us for our listings. Wake up Real Estate Agents………….

Then, have a look at what a local brokerage had to say in their newsletter about making sure their listings are accurate on these sites (ever think about just killing the feed?):

This is big news in the real estate community. We know these sites are very popular with the public, and that’s why for years [brokerage] has fed its listings to both sites. This has been done to try to minimize the kind of factual errors often found on these sites. Despite their popularity, Zillow and Trulia are not getting their content from our local MLS, and so listing details can be wrong. Dramatically wrong at times.

As a matter of fact, Zillow itself gives the accuracy of its popular “Zestimates” only two out of four stars in San Francisco, admitting that these estimates have a median error of nearly 12% – that’s a big number. Still these sites are popular, and while [brokerage] believes it has enhanced the user property search experience on its own website, the company will continue to keep an eye on Zillow and Trulia, and leverage these platforms as much as possible.

Finally, have a look at this email I received on the matter:

Realtors are guilty for not keeping up with the times and being completely opposed and scared of technology, as we know well. PocketListings.net being the ultimate example. I still don’t understand how hard it was to make anyone understand the concept of creating their [Realtors’] own listing network that they control. Doing anything to really help agents is ultimately a dead end because they are all stupid – few exceptions like you :) The successful businesses don’t give a shit about agents. Zillow, Trulia…as you stated, mining all the data agents worked hard to create. Redfin, basically wants to cut the agent out of the equation. The solution is simple: kill the feeds and those companies perish, but the industry never will. It’s run by idiots.

Share your thoughts in the comments below…(Remember, you can be anonymous if you choose).

Neighborcity.com…Waste More Time

A reader kindly forwarded us to a “new” website called, Neighborcity and we gotta say, aren’t Trulia, and Zillow enough?

neighborcity1

We didn’t see anything on this site worth discussing that isn’t already found elsewhere. To us, this site is a complete waste of time. Focus your time on Trulia, Zillow (if you must to get a very, very, very rough estimate of your home’s value), and your local MLS. If you want community, go to Trulia, but beware the Realtor answers are usually loaded to bait you in.

Oh, one last thing, check the ranking of agents on Neighborcity. We’ve learned our lesson about calling out fellow agents, but that data is clearly flawed.

Thanks for the tip to the site, best of luck to them. We are fans of technology in real estate and applaud all efforts, but we weren’t impressed. We look forward to be proven wrong.

[Editor’s Note: Okay, we took another look at the site from the perspective of someone shopping for a home somewhere in the country. We’re used to dealing with internet savvy buyers and sellers, so we’re a bit jaded. We can see value in the site for those that are just beginning their home search and land on this site a la Google.]