[quote=FlyerInHi]errr… BG, there is very little inventory right now.
Math wise, we need to build dwellings at a rate greater than household formation (to account for vacation homes). Otherwise there is a shortage. Pretty simple, really.
I didn’t say people need to DIY order to own homes per se. However, they do need to DIY if they buy at the max they qualify for, as most buyers do. That’s why they prefer move in ready.[/quote]No we don’t need to build homes at that rate. “Vacation homes” are typically NOT located in job centers. In CA, for example, most of them are located in resort towns (ex: S. Lake Tahoe & Mammoth Lakes), rural towns with a <15K population as well as "out in the boonies." Millenials don't want to buy in these locales due to not being able to make a good enough living to support a monthly PITI. Boomers buying "vacation homes" aren't "stealing any inventory" from millenials. Actually, when boomers finally decide to sell their primary residence in a CA coastal county or inland city with job centers and "retire" to their vacation home, that opens up another listing for millenials to make an offer on. Regardless of the amount of inventory currently available in any micro-market, some listings are taking longer to sell (60+ days). So some of them don't seem to have any takers, possibly because the asking price is too high and/or seller wouldn't accept a lower price so it is in effect a "test listing."
Honestly, I don't think a huge percentage of millenials (single digits?) are currently in the market to buy a home. Some are still at parents' homes trying to save up for security deposits and a better used car. The ones that are on their own are, for the most part, renters (even long-term renters) because of their inability to save a downpayment despite having a good salary for years. Millenials, as a group, aren't very good savers. They feel they need everything "right now" and many (most) of them are what I would consider "high maintenance" (my own kids included).
Millenials in "flyover country" are a bit of a different breed than those who grew up in CA. Many of them seem to have adopted the values of their parents and it doesn't hurt them that decent housing costs much less there than here. Therefore, buying a house there in one's 20's is actually very doable in many areas.
The last thing our severely overcrowded CA counties need is more housing with no buyers ready, able and willing to buy them.
Builders are not doing anyone any favors by offering a first-time buyer product (or product a little "moved-up" from that price point) in a locale where jobs which pay a living wage are 50+ miles away. All they are doing is creating more sprawl.
