Page 25 - aruba-today-20190525

BUSINESS Saturday 25 May 2019
A25

Young homebuyers scramble as prices rise faster than incomes

By JOSH BOAK urbs, only to rescind it upon
LARRY FENN learning there were 13 rival
Associated Press offers. At one point, they al-
SALT LAKE CITY (AP) — For most decided not to buy a
millennials looking to buy house just yet, figuring the
their first home, the hunt bubble was going to burst
feels like a race against the eventually, said Andy, a
clock. 35-year-old who hosts the
In the seven years since podcast "More Happy Life."
the housing crash ended, But there was also the op-
home values in more than posite risk: "There is the
three-quarters of U.S. metro question about whether it's
areas have climbed faster going to keep going up,"
than incomes, accord- his 31-year-old wife said.
ing to an Associated Press The couple ultimately
analysis of real estate in- made a successful offer on
dustry data provided by a three-bedroom house for
CoreLogic. $438,000 in Vineyard, Utah.
That gap is driving some It includes an apartment
first-timers out of the most that could be rented out
expensive cities as well to defray their mortgage
as pressuring them to buy payments. That will make
something before they are it easier for them to afford
completely priced out of starting a family.
the market. Roughly 1 in 6 homes sold
The high cost of home own- in the Salt Lake Valley since
ership is also putting ex- 2004 have been in a 4,100-
treme pressure on 20- and acre development called
30-somethings as they try Daybreak, being built on
to balance mortgage pay- land once owned by min-
ments, student loans, child ing giant Rio Tinto. About
care and their careers. 5,500 homes have been
"They do want all the same constructed, with an addi-
things that previous gen- tional 14,500 units planned
erations want," said Daryl — enough in total to house
Fairweather, chief econo- This April 13, 2019, photo, shows rows of homes, in suburban Salt Lake City. roughly 65,000 people.
mist for the brokerage Red- Associated Press The homes range from
fin. "They just have more $180,000 to $1 million. One
roadblocks, and they're 4,500-square-foot house in — home prices have risen They are putting less money of the guiding principles is
going to have to come up fast-growing Farmington, even faster. down and carrying more that homeowners can up-
with more creative solu- just far enough away from The Salt Lake City area is debt. And some first-time grade or downsize without
tions to get the homes that Salt Lake City to feel rural among the hottest spots for buyers are looking at con- having to move out of the
they want." but minutes from a ma- first-time buyers in part be- dos and duplexes instead neighborhood.
A Redfin analysis found jor shopping center and cause of a staggering burst of houses. But that cycle of upgrad-
these buyers are leaving Heather's sister. They did of home construction and There is also more pressure ing might not continue as
too-hot-to-touch big-city not disclose the purchase a surge of high-tech jobs. on families to earn two in- it did for past generations.
markets — among them, price for the sake of pri- The suburb of Lehi, which comes, rather than letting Home values need to rise
San Francisco and Seattle, vacy, but they said their served as a film location for one choose to be the stay- for people to build equity
where the tech boom has monthly mortgage pay- the 1984 Kevin Bacon mov- at-home parent. This could that they can use to buy a
sent housing prices into the ments will be $3,000, rough- ie "Footloose," about a rural be a particular challenge new house. Yet if they rise
stratosphere. The broker- ly the same as the rent for town that banned danc- in the Salt Lake City area, too fast, it will become too
age found that many mil- their former two-bedroom, ing, is in what is now known where families are general- expensive for many people
lennials are instead buying 1,000 square-foot apart- as "Silicon Slopes" because ly larger, mostly because of to move up.
in more reasonably priced ment in Mountain View. Adobe, eBay and Microsoft the influence of the Church Parry Harrison, a 26-year-
neighborhoods around "We didn't expect to stay have opened offices there. of Jesus Christ of Latter-day old divorced father of two
places like Salt Lake City, in California because of Of course, the influx of Saints, and about 28% of small children, bought a
Oklahoma City and Ra- how ludicrous the prices people from unaffordable the population is under 18, townhouse in Daybreak
leigh, North Carolina. That, had become," said Jake, a cities is contributing to the compared with nearly 24% for $309,000 in March. His
in turn, is driving up housing mechanical engineer who very problem they were try- nationwide. down payment came in
prices in those communi- works in the medical de- ing to escape: Home prices "The one thing that really large part from selling his
ties. vice sector. in the greater Salt Lake City would make it even more previous home, which ap-
Jake and Heather Rice, Nationally, home prices area surged 10.8% in the sustainable is if wages preciated a robust 25% in
both 35, moved to Utah since 2000 have climbed past year, while average would increase," Robbins the two years he owned
last year from Mountain at an annual average rate incomes rose only 3.9%, said. "Whereas before you it. He hopes to upgrade
View, California, where the of 3.8%, according to the according to figures from could have a young cou- again in five years, when
biggest employers are tech data firm CoreLogic, while CoreLogic and the U.S. Bu- ple buy a place and only his children might need
giants such as Google, Sy- average incomes have reau of Labor Statistics. one of them would work. more space.
mantec and Intuit and the grown at an annual rate Scott Robbins, president of Now, you need both of "It's definitely not a forever
median home price is a diz- of 2.7%. And in the metro the Salt Lake Board of Real- them to work." home," he said. "It's a lot
zying $1.4 million or so. areas with the strongest in- tors, sees the price growth Andy and Stacie Proctor more convenient if I have
The couple and their three come growth — for exam- as having changed the made a bid on a house move-up opportunities that
children settled into a ple, parts of Silicon Valley habits of first-time buyers. in the Salt Lake City sub- are right next door."q