My fiance and I are 26 years old. We’re both college grads, and we’re working professionals (she is a CPA). We make a combined $150,000 a year gross – we’re not “typical” 26 year olds. Most of the people we know around our age (mid 20s and early 30s) are in enormous debt. Only 5% of those friends own a home/condo; however, their loans are adjustable. We’re starting to hear from those friends that the payments are getting tougher to make.
At any rate, all the others either live 8 to a house or still live at home. Among these individuals, most are college grads who work full time (the lowest paid is $40,000 a year). I guess my point is that none of these college grad/working professionals are or will be buying a condo any time soon. This is coming from the top 10% of wage earners for this age group. In fact my fiance and I are considered “wealthy” by government standards, as we are taxed heavily because we “make” too much. We can’t buy a home, but we’re too wealthy.
I’m not trying to whine and complain here; I’m just trying to reiterate what anxvariety said above. There currently isn’t, and there won’t be buyers for the starter market until something changes. The baby boomers never had to pay 60 to 70 percent of their income on housing, so why should the indebted generation of the twenty-somethings have to… Anyone who spends that much of their income on housing is the bigger sucker! There are still many out there; however, they’ll get burned with the rest. I’m not going to reward and/or bail out the suckers who made horrendous financial moves by buying a house they couldn’t afford. I’ve worked too hard to be indebted for the next 15 years in a one-bedroom dump. I look around at my friends and others (the people anxvariety referred to) and I see that they won’t be in any position to buy my piece-of-crap condo if I were to buy one at this juncture.
The people who think the twenty-somethings are going to buy their starter home some day are in for a rude awakening. It won’t even be a matter of making the decision to buy, the Federal Reserve is already talking about reigning in the rampant, exocitc mortgage market. After all of the foreclosures we see in the next few years, even people like my fiance and I (with 770 credit scores) will not be able to get a loan. Oh well, I don’t think real estate will see significant appreciation for next 15+ years.
