IN THE PRESS. Last week, I was interviewed by the San Francisco Business Times regarding my perspective on the competition for local housing between home Buyers in the baby boomer and millennial generations. We’re seeing bidding wars as boomers want to downsize or move closer to their children, while millennials are eager to buy their first homes or upsize!
Read on to learn more about how these stand-offs are impacting our local market. Don’t hesitate to ask us how to position your offer to be the winning offer amongst strong competition. Our team reviews multiple offers on the majority of our listings on a weekly basis, we’re happy to share this valuable intel with you!
Dana Green
Baby boomers and millennials are facing off for real estate in the East Bay
Oct 20, 2021
Ted Andersen | Digital Editor
San Francisco Business Times
It's a clash of the generations in the Contra Costa County residential real estate market,
In the Lafayette, Moraga and Orinda confluence known by its shorthand Lamorinda, Buyer demand is high for homes and the two major groups with enough cash on hand to win the bidding wars are baby boomers and tech millennials, according to a number of real estate agents I spoke with.
The trend is by no means new, and has affected numerous other American cities even prior to the pandemic, but in the Bay Area, the struggle has its own unique contours.
Dana Green, a broker with Compass who covers much of the East Bay, including Lafayette, Moraga and Orinda, told me that the two generations are typically coming into direct bidding competition less on multi-story homes than with single-story ones.
"With single-story homes, you usually see the two generations at the top of the pack," she said.
So who is coming out on top?
"It really depends who wants the house more," Green said. "We are kind of seeing a ping pong match where one wins and then the next time the next one wins. ... That has been our sweet spot all year — when we see both generations competing."
Vanguard Property's Ben Olsen, who specializes in Lamorinda real estate, told me he is seeing the dynamic between the two generations play out where older potential Buyers often want to be closer to their millennial children, while younger first-time home Buyers with kids want to move into the area in part drawn by the high-quality schools. Those contrasting demands also mean differences in what kinds of properties are attractive to the two groups.
"The millennials are generally going to be more flexible about what works for them — not minding two stories, and wanting a bigger yard and not quite caring as much about the total quality of the house if they can get into the right neighborhood, whereas baby boomers are going to be a little bit more picky," he said.
On the other hand, boomers are downsizing into single-story homes and have extra reserves, Abio Properties agent Linnette Edwards told me. "The big discrepancy is that boomers are booming with the extra cash which makes it hard to compete against," she said.
In a bidding war, older Buyers typically have the advantage of a longer lifetime of savings and home equity over their younger counterparts, but according to a Zillow report, younger Buyers have found some success in the Bay Area. In the San Francisco metro area the median age of a home Buyer in 2019 was 42, the same as a decade earlier, and roughly 18% of those 2019 home Buyers were 60 years and older, up just shy of 5% from the previous decade.
The youth buying trend was even more pronounced in the San Jose metro area, where the median age of a home Buyer in 2019 was 39, down from 45 a decade earlier, with about 54% of Buyers between 18 and 39 years old, compared to just 35% in that age group in 2009.
Fast forward to October 2021, and the majority of Buyers in eastern Contra Costa County across all ages are from the Bay Area as opposed to out-of-state and many of the local tech millennials are coming from the South Bay, according to multiple brokers.
Meanwhile, the percentage of homes in Lamorinda accepting offers — a key indicator of Buyer demand in the market — stood at 78% for September, which is close to an all-time high for the area, according to Compass Real Estate.
"Relative to the national trend and even relative to even the local Bay Area trend, we are seeing continued strong demand and growth where I think some other markets are starting to drop off seasonally as you would expect," Olsen said about the Lamorinda market, including Walnut Creek. "But there is so much demand here, we are continuing to charge ahead."