The largest issue facing millennial would-be homebuyers is the ability to afford property in New Jersey, according to panelists at “Affordable Housing for Millennials,” a breakout session at the recent 2019 Governor’s Conference on Housing and Economic Development in Atlantic City.
“Baby boomers ripped a 10-year hole in the economy, when many millennials were graduating high school with (fewer) future opportunities,” Joe Getz, founding principal of real estate consulting firm JGSC Group, said. “Now, millennials, the largest generation in history, also have lower income levels than Generation X and baby boomers, plus, on average, they are carrying nearly $32,0000 in student loan debt.
“Therefore, to attract homebuyers, we must actively create downtowns with opportunities to host and recruit good jobs at places we know people want. There are so few communities doing that in New Jersey compared to other states.”
“In the last year, we’ve only seen 1 to 2% wage growth, which is way behind the national average,” Jarrod C. Grasso, CEO of New Jersey Realtors, the leading professional and advocacy organization for the state’s real estate industry, added. “Plus, the average property tax bill in New Jersey is almost $9,000.
“What my Realtors are finding is that, even if a person can somehow afford a $350,000 home, they may not be able to afford the property taxes that go along with it, and that kills the deal.”
Edward G. Martoglio, co-founder and principal of RPM Development Group, a diversified real estate development, construction and management firm in Montclair, said he has seen New Jersey residents struggle to afford rentals, too.
“On average, with affordable housing, a three-bedroom apartment still costs about $1,000 per month — and, unfortunately, throughout New Jersey, there are still lots of families making less than $36,000 annually,” he said. “That’s why, like most affordable rental housing operators in New Jersey, our vacancy rate hovers around 1.5%.”
Phyllis Salowe-Kaye, executive director of consumer watchdog New Jersey Citizen Action, said it often can still be challenging for those with limited or bad credit to find housing, too.
“It’s been more difficult for millennials to get credit since the 2008 financial crisis, so they have to be more creative about how they receive financing when they go to purchase homes,” she said. “For example, working with New Jersey Citizen Action, lenders and banks have developed alternative credit models when giving loans to first-time homebuyers. They might look at a cell phone or utility bill or credit card or car payments instead.
“It’s therefore incumbent upon management companies and landlords of rental properties to look to do the same.”