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Millennial homebuyers are driving up prices on low end of real estate market

Posted: 8:25 AM, Jun 10, 2019
Updated: 2019-06-10 09:25:20-04
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KANSAS CITY, Mo. — Across the country and in the Kansas City area, first-time homebuyers are driving up the price of houses. A recent study by real estate website Zillow said millennials are reaching the age when most people buy their first home.

With about 3 million more millennials than people in the previous generation, demand is higher than supply.

In Kansas City, there is space available for new houses, which could help the area buck the national trend.

Mike Frazier, the President and CEO of ReeceNichols, said the millennial influx mostly impacts homes under $300,000. Buyers, whether millennial or not, are taking risks when it comes to buying a house in that range.

"The buyer is having to make decisions whether they're going to go above list price, are they going to buy it sight unseen, are they gonna go through an inspection and really look at the house, and say, 'I'm going to take it without an inspection.' A lot of that stuff is happening, which is from my perspective is dangerous," Frazier said.

Frazier suggested buyers, not just sellers, work with a real estate agent so there is someone on their side throughout the process.

"It's one of the most important financial decisions you make in your entire life. It can help you build wealth, it's where we raise our families, it's where we call home. We want to make sure that experience is a great experience, but also that you're making a sound purchase," Frazier said.

Because there is space on all sides of the Kansas City metro area ripe for development, builders could put more new homes on the market to balance it out. Frazier said most developers build homes over $300,000 because they are more profitable, but agencies are working with developers to promote lower-end housing.

Frazier said the market is balanced for homes listed for sale between $400,000 and $1 million. For houses over $1 million, there seems to be more sellers than buyers.