It’s not all about San Francisco and New York City, says NerdWallet, the website that analyzed American metropolitan areas and came up with a list of the top 10 cities for young entrepreneurs. The list includes some of the spots you’d expect: Denver, Colo.; Seattle, Wash.; and Austin, Texas.

But we were happily surprised to see Midland on the list, ranking No. 8 above Boston (No. 9) and Fargo, N.D. (No. 10).

So what earned Midland a spot on the list?


Home For Sale yard Sign

You know those Millennials and how they want their mortgages with cheap rates and minimal down payments. They want speedy pre-approval and closings with no hiccups. And they want it all right now.

If that seems demanding, well, that’s the Millennial generation for you. The interesting news is, according to a recent survey by Better Homes and Gardens Real Estate, Generation Z is more willing to make sacrifices to achieve home ownership. That’s right: The same generation that knowingly misspells words all over Twitter and Facebook is willing to sacrifice more than the “y” and “o” in “your.” They say they’re willing to sacrifice social media access (HORRORS!) in order to own a home.


Millennial Homebuyers

Millennial Homebuyers are missing from the market, but Austin and Dallas may be better values first-time homebuyers in this generation over San Antonio and Houston.

Where are all the first-time homebuyers? In their cozy rentals, that’s where!

With a market almost completely devoid of newby buyers, and the rental market being as competitive as it is (just ask my friend looking for a single-family home in East Dallas!), and prices going up across all segments, it’s just hard to find a place to put your leather couch and Le Creuset stock pot. Millennials hold a lot of potential when it comes to real estate purchases, but where can the find the best value? Is it San Antonio and Houston?



Downtown San Antonio’s Dolorosa Bridge as seen from the Riverwalk

I have a few friends that moved to San Antonio after college. One of them is an architect and the other was a medical student. Both were initially bummed about moving to the Alamo City. It was so different from Houston and Austin and Dallas. They weren’t sure they would like it. They didn’t know a lot of people there.

I now see them post cool photos of cycling trips, historic buildings, trips to local watering holes and parks … they either learned to love San Antonio, or they busted their bottom to build the momentum the city needed to be a cool place. And you know what? More and more Millennials are doing the same thing, opting for San Antonio and Houston over Dallas and Austin according to Trulia’s dissection of U.S. Census Bureau surveys.


Sachse Home

This is a theme that was repeated over and over at the National Association of Real Estate Editors spring conference. With the Millennial generation becoming the newest cycle of homebuyers, we have to wonder what phase of their lives will influence trends in real estate the most.

This story in the Washington Post really summarizes the issue well. So, when millennials decide to settle down and have a family, where will they settle? Will they make compromises and stay in the urban core, with its dense population and small footprints? Or will they eschew that lifestyle for more open space, a yard, and other typical suburban amenities?


Hottest Rental Markets in the US CROP

High rates of student loan debt, increasing interest rates, and a still slow job market in most of America will send rental rates among Millennials sky high, resulting in 46.8 million American renters in 2015. That’s according to Real Property Management, who sent us this interesting infographic on the tastes and mindset of Millennial renters. (more…)

5818 E University extI love this story because the guy in the WSJ photo is working in a coffee shop in St. Charles, Illinois, on the Fox River Valley where I grew up. He had two years of college and dropped out, for whatever reason with $14,000 of debt, and now the Wall Street Journal is using 26-year-old James Roy as a poster child for the tough life the Millennials face: it takes kids today to age 30 before they earn a median-wage income of about $42,000. Back in 1980, kids at age 26 were hitting $42,000 a year. That $42,000 is apparently a marker of independance from mom and dad. NA-BY263_WORKFO_G_20130929194421

About a third of adults in their early 20s work full time, a proportion that rises to about half of adults in their late 20s. The labor-force participation rate for young people last year declined to its lowest point in about 40 years, according to the report:

-The decline in employment among young people mirrors a drop among the broader population. The share of U.S. adults who work peaked at nearly 65% in the late 1990s and early 2000s, and has trended downward ever since. An aging population explains part of the decline, but even workers in the prime of their professional lives are less likely to work today than a decade ago.

-In recent decades, the U.S. has seen a gradual outward shift in people’s professional lives: Americans today tend to start work later and continue working longer than in past generations. A decade ago, a boy in his late teens was twice as likely as a man his grandfather’s age to hold a job; today, the teen is actually less likely to be working.

-For young people, the delayed entry into the world of work is partly a reflection of the recent recession, but it is also driven by long-term trends, including more jobs that require advanced skills and fewer high-paying factory jobs that required little more than a high-school diploma, the report found. The “new knowledge economy” has spawned more internships and bite-size credentials as a result.

More than any age group, the Millennials have taken a lick from the Recession: between 2000 and 2012, the employment rate for people ages 21 to 25 dropped from 84% to 72%. Young men experienced an even steeper decline, from 80% to 65%. For those without post-secondary education, it’s worse: dropping from 66% to 53%, while the peak unemployment rate for young African-Americans’ AFTER the recession reached 30%, double that of young whites.

So of course, how are these people going to afford a house? It sure is not going to happen in the large metropolitan areas, and we know that many Millennials move back home with mom and dad.

And is that really so bad?

Of course, one of the good things about our economy in Dallas is our well-priced homes, making home ownership available to more Millennials… and long as they are not mired in student or other debt. More education has traditionally been a plus in future earning potential, but the high cost of higher education today is making many young people reconsider the priciest private college educations and studies.

Of course, look at this FHA approved, one level, updated,  2 bedroom, 2 full bath condo within walking distance to Central Market on Lovers lane, LA Fitness and less than a mile from SMU. The condo is on the second level, has assigned covered parking and a laundry room within the unit for a washer and dryer. There is also a large covered patio overlooking the beautiful courtyard and pool below. Listed with the darling Tony Nuncio, at Dallas City Center, asking $109,000 and that’s not too shabby for a Millennial!  5818 E University LR 5818 E University Kit 5818 E University master 5818 E University bath 5818 E University 2nd bed 5818 E University pool



Bryan Head Shot 2011Bryan Sherman is the Senior Vice President and Regional Sales Executive at Bank of America in Dallas. And, for a banker, he’s a pretty funny guy. When I asked him exactly WHAT he does at BofA — I love to give anyone from the Big Three a hard time, because frankly, I prefer smaller local banks and lending institutions — he said, “I’m in charge of all those B of A loan officers running around the street!”

And of course, he’s competition to Well Fargo! Boo-yah!

Bryan tells me that today’s first time home homebuyers are in a better place than their parents ever were. Despite all the ick we slogged through since the financial crisis peaked in mid 2007, the millennials are buying homes and getting mortgages.

“We believe that education is the key to mortgage success,” says Sherman, “and at BofA we are trying to put owners in sustainable home ownership that they can comfortably afford.”

Sustainable is a great buzz word meaning homes they can afford.

As regular readers of this blog know, our market in Dallas has flipped into a seller’s market. The latest Case-Shiller index showed home prices up up up more than 12.2% in May, and Dallas home prices are now 7.6% higher than they were a year ago. I was at a showing recently, and the seller had friends coming over for a glass of wine. All the guests talked about was how they were going to rush home and put their homes on the market, now, too, because values were up and you sell high. Yeah, herd mentality.

Even Steve Brown is getting so disturbed I may need to send him some Preparation H.

So yeah, I said, it may have been a great deal for these kids to buy a home back in the doom and gloom days when President Obama rolled out that first time homebuyer’s tax credit. I know my kids sure took advantage of it, and then just sold that first place and rolled equity over into a second home.

So maybe this market stimulation is coming from some of those buyers, buying up.

“It’s really important that we sit down with clients and educate them about the products out there,” says Sherman. “Every single customer has a unique situation.”

We are still in a full document environment, and every loan depends on the customer’s personal scenario as to whether they should get an ARM or fixed rate product, he says.

Yes, interest rates are rising, but are still at record lows: parents of today’s millennials recall 18% interest rates on homes in the early 1980’s.

“We are nowhere close to that,” says Sherman. Phew!

Interestingly, Freddie Mac economists even declare housing remains affordable. Rates would have to inch up to 7% before housing costs would phase middle class families, says Freddie.

And as he dispels interest rate phobia, Sherman also says that young buyers need to dispel assumptions of the market tightening. Loan products are still available that do not require 20% down. You can buy a $300,000 home for 5% down. Tools developed by B of A hep young buyers learn about the various mortgage products available: the home loan guide and planner.

Another change that may affect the kids: consumers are pulling back from refinancing — so our mortgage market has switched gears from a refi focus to purchase, which may make bankers a little more eager for the business of lending to home buyers if they want any business.

Now this stat surprised me: Millennials tend to like fixer-uppers: A recent NAR (National Association of Realtors) survey says 68% of Americans think now is a good time to buy a home, and 30% of the millennials would prefer a fixer upper over new construction. That’s amazing because I thought this generation had everything DONE for them — ha by us! But 1 in 3 millennials say they would prefer a fixer upper over a house with minimum repairs. They are devouring the FHA 203K product, which allows an individual to purchase a fixer-upper home purchase price plus cost to improve. The home must fit into FHA home limits, which in Dallas is $271,000, limited to the home appraising after completion.

So I guess we needn’t feel too sorry for our kids — they have email, Instagram and are starting life with lower interest rates than we saw! Sherman sees a lot of natural triggers down the pike to keep our Dallas market strong: transplants, home ownership, marriage, divorce, growing a family.

Takeaway: Dallas’ housing values are increasing, making Dallas a prime market for home buyers needing mortgages  — yes, getting a loan has sure changed in last few years, but like it or not, the suits are going to have to ease up on lending to qualified home buyers.