Looking into my crystal ball this year (okay – local economic data), I see that buyers and sellers are going to be coming from all areas of the buying spectrum. For years, Baby Boomers were the age group to watch – now, as Millennials and Gen-Xers get into the game (these are the children and grandkids of the Boomers), it's going to be interesting to see how 2015 heats up. George Mason University's Center for Regional Analysis (CRA) put together some information on how they will affect the market this year.
Economists from CRA point out the first time buyers are now coming from kids of the Millennial generation (born between the early 1980s and 2000). In 2015, adults born in 1980 are turning 25 – a good ripe age to purchase a first home.  Time is the key point for Millennial purchasers as they approach their first home purchase. During the next few years, time will provide them income growth and marriage, which usually pushes them into the first-home market (sometimes with a baby carriage). Watch them to take advantage of first-time buyer programs (3% down payment) now being offered from Fannie Mae and Freddie Mac.
Generation X
These buyers and sellers born between 1969 and 1980 (depending on who you talk to), will be moving based on contingencies – contingent on interest rates (which today stand below 4%) and equity growth in their home they bought in the last decade. They are also more likely to purchase new construction, according to the CRA report.
Baby Boomers
We'll be seeing a larger wave of retirees coming out of the Baby Boomer group and while many of them are in the suburbs, believe it or not, they're intending on staying in the D.C. area and some will continue to stay in their current homes. Meanwhile others will look to scaling down to condos and over-55 housing.
Key Market Takeaways
  • Look for a continued tight market. Even though inventory will increase seasonally, there's still a shortage of homes on the market. First-time buyers will be a key driver.
  • Growing demand for single-family homes, but we'll see smaller homes, lower price points
  • The suburbs are not dead and, in fact, are poised for a rebirth.
  • While demand will be there in 2015, supply won't catch up until 2016.
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Until next time…