As New Braunfels experiences exceptional growth, it’s important that we, as a community, understand national trends and how they might impact our local market. I am not a Realtor, nor do I have plans to become one, but I do understand that many national trends begin on the East and West Coasts and work their way to the middle of our country.
Shouldn’t these national trends be considered when evaluating our local real estate market? With the increasing population growth, what’s coming our way here in New Braunfels?
The millennial generation is the largest in U.S. history. In 2017, it made up about 34 percent of all American homebuyers.
One trend to note is that a large proportion of millennials are skipping the starter home and going straight to the dream home, or the “forever home.” Part of this is a result of this generation getting a slower start in the marketplace as a result of the great recession.
Not only that, but higher education tuition has increased, leaving graduates with more student loan debt as they exit college and enter the workplace. Millenials are often late leaving the nest and delaying the move out on their own.
Another explanation for the jump to a larger, more long-term home could be the choice to rent longer before entering the housing market, thus allowing more time to save.
According to the National Association of Realtors (NAR), 30 percent of millenials bought homes for more than $300,000 in 2018, up by nearly 15 percent since 2013.
This is relevant because as we see more and more people moving to New Braunfels, what characteristics will they find most valuable? Proximity to Interstate 35? Historical character? Square footage? School quality? Neighborhoods? Views? Amenities?
It will be interesting to see how this plays out locally over the next few years. Will New Braunfels have the housing market to sustain those kinds of buyers?
Also, with half of millennials having student debt, will that slow down home buying for the younger millennials?
According to NAR Chief Economist Lawrence, “Millennial buyers, at 85 percent, were the most likely generation to view their home purchase as a good financial investment.”
Local Realtor D. Lee Edwards with D. Lee Edwards Realty seems optimistic that “the increase in the millenials to the housing market will help offset any changes from the Baby Boomer generation. Millenials are buying around 28 instead of 30s as did the Generation Xers, but later than Boomers and buying well above starter home prices.”
If you Google the word “surban” you’ll find it is a new word used to describe areas that have a mix of both urban and suburban characteristics. ULI’s Terwilliger Center for Housing by John Burns Real Estate Consulting coined the term and claims that these types of areas will draw more than 80 percent of new and upcoming households as millenials and young families seek the amenities of the city, but with family-friendly housing and better education.
While the new term “surban” may not exactly define New Braunfels, it’s hard to argue that its meaning is not one of the reasons why people want to move to our city.
Other reasons, of course, include our bustling and thriving historical downtown area combined with our rich independent history. There’s no doubt we maintain our individuality from neighboring urban areas as you can see the pride in one’s face as they describe the beauty in living here.
However, we must admit that New Braunfels and its marketplace are catering to the needs and demands of its ever-growing neighborhoods, providing a higher quality of life.