Gen X Homeowners Make Comeback after Coming Up in the Crash

Mar 8, 2017 by

Homeowners in Generation X are making a comeback after coming up in the housing crash, according to the National Association of REALTORS® (NAR) recently released Home Buyer and Seller Generational Trends study for 2017. More Gen X homeowners—who were most dogged by the downturn—are set to sell this year, having regained enough equity lost in the recession.

“Gen X sellers’ median tenure in their previous home was 10 years, which puts many of them selling a property they bought right around the time home values were on the precipice of declining,” says Lawrence Yun, chief economist at NAR. “Fortunately, the much stronger job market and 41 percent cumulative rise in home prices since 2011 have helped a growing number build enough equity to finally sell and trade up to a larger home. More Gen X sellers are expected this year, and are definitely needed to ease the inventory shortages in much of the country.”

Gen X has taken a backseat to millennials in recent years, who have been the primary source of opportunity in housing, Yun says. More activity on the part of Gen X homebuyers and sellers this year opens up new prospects in the market.

According to the survey, the share of Gen X homebuyers grew to 28 percent—the largest percentage since 2014—but is behind the share of millennial homebuyers, 34 percent, and the share of baby boomer homebuyers, 30 percent. The trend toward multigenerational living is going strong, driven by baby boomers housing adult children who either have not moved out or moved back in after moving out.

“The job market is very healthy for young adults with a college education, but repaying student debt and dealing with ever-increasing rents on an entry-level salary are forcing many to either shack up with several roommates or move back home,” says Yun. “This growing trend of delayed household formation is one of the main contributors to the nation’s low homeownership rate.”

Student loan debt is also an issue for Gen Xers and younger boomers, though Gen Xers have the biggest burden, with a student debt load of $ 30,000—more than millennials’ $ 25,000 and boomers’ $ 10,000, according to the survey. Student debt plays a major role in the ability to save for a down payment on a home; in fact, 55 percent of millennial homebuyers, 29 percent of Gen X homebuyers and 9 percent of boomer homebuyers report student debt has stifled their savings.

“Repaying student debt also appears to be slowing some current homeowners who went to graduate school and now can no longer afford to sell and trade up because of their loans,” Yun says. “Nearly a third of homeowners in a NAR survey released last year said student debt is preventing them from selling a home to buy a new one.”

Gen Xers aside, there are shifts occurring in the millennial generation. One significant movement, according to survey, is the presence of children: 49 percent of millennial homebuyers have at least one child, prompting more home-buying activity in the suburbs.

“Millennial buyers, at 85 percent, were the most likely generation to view their home purchase as a good financial investment,” says Yun. “These strong feelings bode well for even greater demand in the future as more millennials settle down and begin raising families. A significant boost in new and existing inventory will go a long way to ensuring the opportunity is there for more of them to reach the market.”

What hasn’t changed, according to the survey, is the need for a real estate professional. Ninety percent of those surveyed worked with a real estate professional to buy or sell a home—92 percent of millennial homebuyers and 90 percent of millennial sellers, and 88 percent of Gen X homebuyers and 89 percent of Gen X sellers.

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The post Gen X Homeowners Make Comeback after Coming Up in the Crash appeared first on RISMedia.


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Is The Housing Market Going To Crash Again?

May 16, 2016 by

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Going Bust: Pain of Vegas Housing Crash Still Isn’t Over

Dec 5, 2015 by

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las vegas  nv   may 6  world...
ShutterstockAway from the bright lights and big money, the Las Vegas housing market still has not recovered fully from the collapse.

By Melissa Allison

For the past decade, housing in Las Vegas has been a scene straight out of the Wild West. Rules have been bent, and lives ruined — a consequence of a housing crisis that caused such catastrophic and widespread declines in home values that much of the city remains on its knees. (Click here for Zillow’s video on the Las Vegas bust.)

At one point in 2012, more than 70 percent of Las Vegas homeowners with mortgages were underwater, many of them owing more than twice what their homes were worth.

The negative equity rate has fallen to 25 percent but remains higher than any other major market. In normal markets and times, that rate is closer to 3 percent.

Among those affected is Terrie Brooks, a bingo agent for 30 years who never dreamed she’d resort to giving blood to pay her mortgage.

With income of $ 60,000 a year and money in savings, she paid her mortgage for four years after the recession hit and her employer cut her hours.

She fell behind after her college-age son, who rode a moped between classes and work to save on gas money, was in a terrible accident. A traumatic brain injury left him incapacitated for two years before he died.

“I thought I had put away for a rainy day and was keeping up. Once my son was in the hospital, I didn’t care,” said Brooks, who often stayed home, even when work called, to feed her son and otherwise care for him.

“I gained weight, my health went to hell. You don’t care anymore…. Then you say, ‘Look what a mess I’ve gotten into because I didn’t care.'”

Brooks tried to make up for the lost hours by selling blood and participating in focus groups.

She also tried to get a loan modification but became stuck in a bureaucratic cycle — a process so common it was the subject of one of the focus groups she was paid to attend.

Squatters and Their Tenants

Getting a loan modification when people all over town — and many across the country — want one too is no simple thing.

Some people give up and stop paying.

“I closed a deal in August where a guy hadn’t made a payment in 88 months,” said Tim Kelly Kiernan, a real estate agent with Re/Max Benchmark Realty.

“It wasn’t illegal. He was just playing the system.”

ZillowTim Kelly Kiernan

That homeowner wasn’t alone, by a long shot.

Many people in Las Vegas stopped paying their mortgages for months and years at a time with little consequence.

Some filed for bankruptcy and walked away, assuming lenders would take ownership, only to return years later to find the homes still in their names.

Sometimes, their homes had been taken over by squatters or, more absurdly, by renters making monthly payments to someone who’d swooped in and pretended to be the owner of an empty house.

Kiernan had one such client who ended up doing a short sale — negotiating with his lender to sell the house for less than he owed — and walking away with cash to relocate (and to leave the house in good condition).

There were even cases of homeowners being sued by squatters who were injured while squatting, Kiernan said.

“I can’t make this stuff up,” he said. “There are all these crazy stories, and [that] story is very common — people filing bankruptcy and leaving their property thinking they were done.”

Tangled in Red Tape

Getting lenders’ attention is the hard part.

For a while after the housing bubble burst, lenders rubber-stamped foreclosures so fast — in Las Vegas, foreclosures reached six times the national rate — that they ended up in trouble and were forced to slow down.

Now they often approve short sales and loan modifications, if a borrower keeps the same lender long enough to negotiate such a deal and to exchange the proper paperwork.

“It can be very frustrating,” said Christine Miller, a lawyer at the Legal Aid Center of Southern Nevada.

“Even though you sent a packet, and the fax transmittal shows 54 pages went through, they [the lender] will say they don’t have it, or to send it again.”

It’s against mortgage servicing regulations to draw out the process, but fighting that means filing a complaint with the Consumer Financial Protection Bureau, “and that’s a process” as well, Miller said.

Tangled in financial red tape, some homeowners turn to experts like Judah Zakalik, an attorney who for two years defended banks against predatory lending lawsuits, then was laid off and switched to the consumer side.

ZillowJudah Zakalik

People have to be careful where they turn for help, Zakalik said.

“When we started in 2009, there were probably over 250 loan modification specialists and attorneys in this city doing this work,” he said. “A lot of them were taking advantage of people’s desperation.”

Some charged upfront fees, then skipped town. Others filed bankruptcy papers but didn’t take clients’ names off homes — and squatters often beat lenders to those properties.

Even now, people are renting abandoned homes from landlords who are not the rightful owners. “I see it at least once every two weeks. I saw it this morning,” Zakalik said.

A Morality Shift

Despite their dire situations, many people balk at filing for bankruptcy or not making mortgage payments.

“They’ve been told, ‘You’re a bad person if you do that,'” Zakalik said.

During the recession, he said, “I’d sit down with people and have discussions about their morality. [I’d tell them] you have to look out for your family’s future. If you throw $ 700,000 at this loan, you’re taking away money you could invest in your future, your retirement, your children’s future.”

The need for those discussions has waned.

“People understand that now. They understand that corporations are looking out for their own best interests, and they have to look out for themselves.”

There’s been a shift in moral consciousness, he said, “at least in this city.”

Military retiree Robert Lujano stopped making payments just to get his lender’s attention.

“They said, ‘You’re not making payments.’ And I said, ‘That’s right. Didn’t I try for five years to get you to refinance?'” Lujano recalled.

He negotiated a short sale that included $ 2,500 in relocation fees. It only marginally hurt his credit score, and he plans to buy another house next spring.

“This would be a great time for many, many people to buy a house,” he said.

With help from the legal aid center, Brooks also renegotiated her mortgage — but the relief is temporary.

Her monthly payment has dropped from $ 1,300 to $ 760. After 22 years, however, she will owe the full balance of her original loan — $ 100,000.

“They said, in a couple years I can do a short sale,” Brooks related hopefully.

If not, there’s bound to be another way.

Already, a passel of homeowners are pioneering another mortgage frontier: re-defaults.


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