By 2040, she told members of the Valley Real Estate Network in Pleasanton, the Bay Area will be home to 2.1 million more people with at least 1.1 million more jobs to choose from. All-cash home sales in September accounted for 24% of everything that was bought and sold here.
Two-bedroom, two-bath apartments in California now rent for an average of $2,100 a month, higher in Pleasanton, and as much as $3,300 for a nice rental in a decent (though not wealthy) neighborhood in San Francisco. Better yet for Realtors looking for buyers who are choosing between renting and buying, there really aren't many apartments available, with 97% of them already leased in Rodoni's survey.
The No. 1 buyers of homes here today are "echo boomers," those 35-50 year olds who are the children of the Baby Boomers who are already settled and, for the most part, living comfortably. They may someday sell their Pleasanton homes, but a tight inventory market today indicates that most are staying put. That's causing a price squeeze which is slowing down sales a bit and certainly limiting opportunities for first-time buyers.
But price may not be a concern of the Millennials, a new wave of Echo offspring now in their mid-20s. Rodoni said Millennials made up 28% of everything that was bought in residential real estate last year, and their numbers and finances are both growing. Many in this age group work at at Google, Yahoo, Facebook, Apple, LinkedIn and Twitter and other large high tech, software and social media companies whose multi-billion-dollar portfolios are passing those revenues on to employees. They are also part of the baby incubator companies that are being bought out by the "big mommas and poppas," Rodoni said, gaining bonuses and buy-out offers making them independently wealthy and hungry for better lifestyles and homes.
They'll be heading this way to take advantage of more reasonable housing prices. In the next four years, 140 of these small start-ups will go public, as Twitter did this week, or will be merged and acquired in the Silicon Valley.
The Millennials offer Tri-Valley cities, businesses and Realtors unique opportunities to lure these newly-rich away from places like Facetown, a $120-million, 394 rental unit housing community that will be built within walking distance of Facebook's campus. Filled with amenities that may keep their workforce happy, including sports bars, yoga workout centers and even free ice cream and lattes along trails and walkways, crying babies and toddlers won't fit in as renters marry and start their families.
"Imagine when all these financially-independent couples leave places like that, and they will," Rodoni asked. They'll be attracted to communities that have these types of services best suited to their lifestyles as young parents, including good shops and coffee shops, schools, parks and transportation."
"At the end of the day," Rodoni said, the next year for Realtors in the Tri-Valley will be great, the next three years "are going to be wonderful," and the amenities Pleasanton and nearby cities can offer the new generation of homeowners will bring major economic gains.
Already, buyers are paying 30% over premium on the Peninsula, and sellers in the Tri-Valley also are seeing multiple offers. "The Millennials are coming," Rodoni told those at the real estate meeting. "Are you ready?"
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