| We’ve long known that the recovery from the Great Recession was unequal. In tandem with a report that a key housing market indicator is slowing comes several reports that highlight just how much more difficult it has been – and will continue to be – particularly for Millennials, and probably the generation after them.
A total of 45,901 U.S. single-family homes and condos were flipped in the third quarter of 2018, down 12 percent from a year ago to the lowest level since Q1 2015 – a 3.5-year low, according to a new report from Attom Data.
Homes flipped in Q3 2018 represented 5 percent of all single-family home and condo sales during the quarter – down from a 5.2 percent home flipping rate in Q2 2018 and down from a 5.1 percent home flipping rate in Q3 2017 to the lowest level since Q3 2016.
“Home flipping acts as a canary in the coal mine for a cooling housing market,” Daren Blomquist, senior vice president at ATTOM Data Solutions said in a statement.
Shockingly, the Boston area was not on the list of places where you can turn a flipping profit, probably because even a dilapidated mess here is not a flip. It’s a “fixer-upper” – and it’s selling for more than $300,000. The buyers will live in it while they’re repairing it, not with an eye on profit but because it’s the only place they could get in the bidding wars.
And that presupposes a Millennial with the wherewithal to save a down payment. Hint: they don’t.
We’ve covered the reasons why that is in this space before, but here’s a new one: many young people are employed either full or part-time in the so-called gig economy. Shared workspaces are one of the more popular innovations of the gig economy. But in Boston the average freelancer would have to work nearly two full-time jobs to be able to cover the costs of renting both an apartment and a workspace without exceeding 30 percent of their income, according to Commercial Café, a division of commercial real estate aggregator and analyst Yardi Systems.
That threshold of 30 percent spent on housing is often cited by economists and researchers, and it laughably out of reach for Boston-area Millennials.
The average rent for a Boston apartment is a little more than $3,000 per month, or $36,000 per year. The average salary is $71,000. Housing costs are more than half of the average Boston resident’s budget.
That’s just the latest information on the difficulties Millennials are currently and will continue to face, particularly in Boston but also across the county. Like the Great Depression before it, the Great Recession will scar not only this generation, but the country itself for generations to come.
If that’s too depressing a thought, consider this: If the inhabitants of Earth keep up their current behavior, none of this will matter – many of those expensive properties will be under water or destroyed by fire within a couple of decades as the effects of climate change become even more pronounced!
