Baby boomers and millennials are competing for homes, and boomers are winning nationally. But is that really the case in Seattle?
A new national study from Zillow found that homebuyers over the age of 60 grew 47% from 2009 to 2019, while homebuyers ages 18-39 fell 13% during that same period. The construction of new houses slowed in the U.S. following the Great Recession, the study said, which sparked fierce competition between the two generations as millennials became old enough to buy their first home.
A supercharge in demand brought on by the coronavirus pandemic threw this competition into stark relief, Jeff Tucker, a senior economist at Zillow, said in the release. Millennials, many hamstringed by student loan debt, struggled to afford down payments on homes — more than half of which are selling far above asking price — while boomers accelerated retirement plans that spurred decisions to move.
“Whether downsizing or moving to a new town, baby boomers being more active means competition that previous generations did not have when buying their first home,” Tucker said. “And older buyers have the advantage of a lifetime’s worth of savings and home equity to leverage in a competitive offer.”
Equity is the greatest advantage boomers have in the buying war against millennials, the study said, especially as home values across the U.S. have increased by more than 30% since 2009.
Boomers who sell a home they’d owned for several years can use the proceeds from that sale to out-bid younger, first-time buyers. What’s more, a survey of Zillow Premier Agent partners found all-cash offers — which are more common among repeat buyers — are the top strategy for winning a competitive bid.
One place where the takeaways from this study didn’t quite ring true was in Seattle.
Zillow spokesperson Alex Lacter said 17% of Seattle homebuyers in 2019 were at least 60 years old, up from 15% in 2009. Comparatively, 48.6% of Seattle homebuyers in 2019 were ages 18-39, up from 45.7% in 2009.
Lacter acknowledged that the Seattle data was an outlier, but said the increase in purchases by older adults means that millennials in Seattle aren’t trouncing boomers in the way that the opposite is happening at the national level.
“Millennials aren’t really winning, but they’re not really losing either,” he said.
One explanation for why younger adults in Seattle are seeing success in the housing market is that the city is the fastest-growing tech market in the U.S.
The tech industry is dominated by millennials. The average age of a tech worker at Amazon is 31. At Microsoft, it’s 33. And the average salary of a tech employee in Seattle is $158,000 per year, the second-highest in the nation behind San Francisco.
Millennials earning large tech salaries can afford to compete with boomers in a way that many of their counterparts across the U.S. can’t.