The lives of young adults can change multiple times in the course of several years. They get married, have children, send the kids off to school. When home values were rising fast, young people could afford to think short-term and buy a place that suited their immediate needs. For most, a rising market would make moving on to the next property a profitable step—or at least not a financially ruinous one.
But now, with home prices laid low, young homebuyers face the prospect that their needs may change much faster than the real-estate market is moving—which may explain why Jeanine Wheeler, an @Properties agent, has had several young clients this year who are, she says, “talking long-term, [being] strategic about what they’re going to need in a home in five years, not just where they want to live right now.”
As recently as four years ago, Wheeler says, “it was fine to think that if your life changed in two or three years, you could just sell your place and move on.” Now, she says, “you should be planning to stay as long as you can.”
Most of the strategic buys that Wheeler has seen entailed skipping a step or two: bypassing the single-person’s one-bedroom condo and going straight to the two- or three-bedroom unit—or skipping condos entirely and starting with a single-family home. “With prices where they are, affording the larger place is easier,” she notes, although she also stipulates that in these uncertain times, nobody should go after a home they can’t afford.
Cara Young, one of Wheeler’s clients, didn’t skip to a larger-size home, but to what she considered a more desirable location where she could stay longer. When the 29-year-old couldn’t find a two-bedroom condo that she loved in Lincoln Square, Andersonville, or Uptown, her parents made her a deal: They would help on the down payment so she could afford a place in Old Town, a neighborhood that both she and her parents deemed a better long-term investment. Should she move on to a larger home, Young says, her parents will hold onto the Old Town condo, either as a rental or as a place where they can stay when visiting Chicago. “ We’re planning on [keeping it] at least ten years,” she says.
Ryan and Emily Andersen, both 25 years old, plotted a different strategic course. They live in Lincoln Park now and have no kids, but when they do, they plan to move to Lake Bluff, where Ryan grew up. “We wanted to take advantage of the low prices now,” Ryan says, “because we don’t expect Lake Bluff to get any more affordable a few years from now.” With help from Ryan’s father, Brad Andersen, the managing broker at Griffith, Grant & Lackie Realtors, they found a house being sold as a short sale. In 2007, the place had sold for $625,000; earlier this month, Ryan and Emily Andersen paid $325,000 for it. The very next day, they signed tenants to a one-year lease. “Their first rent payment is due May 1st, the same day we make our first mortgage payment,” Ryan Andersen says. “The rent will cover our payments.” In four or five years, when the Andersens expect to be ready to move to the suburbs, they will have a home waiting, bought at a depressed 2010 price.
3 weeks ago