Farrah Poladi wants to correct something she’s heard for years about her generation, people in their 20s and 30s popularly known as millennials.
“We aren’t different from other generations,” the 32-year-old teacher says. “We have the same goals. We want houses.”
Poladi and husband Andrew Llorente, also 32, took the plunge this week. They bought a three-bedroom, $368,000 home in suburban Carmichael near Madison Avenue where they will set up a barbecue grill in the backyard and where they hope to start a family: two kids. One Corgi.
It’s finally happening. The generation known for living with their parents well into their 20s is showing early signs of becoming a home-buying force, say real estate industry analysts, home builders and regional planners.
Millennial homebuyers have increased a dramatic 62 percent in the last four years, according to an analysis conducted last week by CoreLogic, a real estate data tracking firm.
CoreLogic estimates that millennials, the oldest of whom are reaching age 37, are now buying more homes than Generation X and the Baby Boomers, who range from ages 38 to 72.
“Millennials are the number one demographic. They are the next generation of home buying,” says builder Katherine Bardis, who with her cousin Rachel Bardis pioneered infill townhomes popular among millennials at The Mill at Broadway just south of downtown Sacramento.
“It is a miss if home builders don’t focus on them.”
Builder John Kuntz of BlackPine Communities says he’s seen young couples bump into each other at model homes at the Farmhouse at Willow Creek in Folsom and bond on the spot, talking excitedly about moving into the community where prices start in the high $400,000s.
For a decade, millennials struggled to land jobs during the Great Recession of the late 2000s and early 2010s. It led to people in their 20s living at home with their parents for years longer than previous generations after graduating from college.
At the same time, millennials borrowed heavily for college as government cut public support during the recession. A quarter of millennials are in debt by $30,000 or more, most of it credit card and student loan debt, according to a survey in April by NBC News/GenForward.
Census data show that home ownership nationally among adults under age 35 peaked at 44 percent in 2004, near the height of the real estate bubble when people were pushing beyond their means.
After the housing and economic collapse, home ownership dropped to 34 percent in 2016 among the under-35 millennial set.
But the economy has rebounded. More young people have steady employment and have hit the age when they are starting families and setting down roots.
Two-thirds of millennials view home ownership as part of the American Dream, according to a Nationwide Mortgages company survey. Notably, one-third hope to buy in the next three to five years.
For many, it will still be an uphill climb, especially in California.
A study by SmartAsset, a personal finance company, shows that Sacramento is the 15th-toughest city in the country for first-time buyers to come up with a down payment. Six California cities rank in the top eight nationally, all coastal, led by Los Angeles and San Francisco.
It takes typical wage earners in Sacramento nearly six years to save the traditional 20 percent down payment for a median-priced house. The median sales price in March for an existing home in Sacramento County was $350,000, the highest level in 11 years. The least expensive new homes in new subdivisions, meanwhile, are selling typically for more than $400,000.
For some, it means asking family for financial help.
Sacramento social worker Andrea Cutler, 31, bought her starter home in Natomas in 2009 with a down-payment loan from her dad. She paid him back. Now, she and husband Seth Cutler are buying a second home.
She jokes it means she can’t afford to go to Coachella, the popular music festival sometimes cited as an emblem of the millennial generation’s preference for experiences over possessions.
With housing prices going up, Cutler said, she felt she needed to be in real estate. “I saw it as an investment,” she said. “I wanted to start my life. I wanted my own washer and dryer.”
Even if they can raise the money for a down payment, potential buyers face another disheartening reality: Few houses are on the market.
The Sacramento Area Council of Governments warned this month that Sacramento needs more houses of all types and prices, urban and suburban. In the capital region, only one housing unit is being built for every six new jobs. That’s far below the 1-to-2 ratio considered ideal.
“Limited housing supply is driving up housing prices in the region, making it difficult for many millennials — especially first-time buyers — to buy a home or compete with buyers who can offer more upfront,” SACOG planning manager Kacey Lizon wrote.
Construction safety consultant Jeff Eckmann, 33, and his wife, Nicole, 27, parents of a 1-year-old, ran into that problem and several other hurdles to become homeowners.
They couldn’t afford a home where they lived in Orange County, so they moved to Sacramento to give themselves a better shot. But they couldn’t find one they could afford in their city of choice, Folsom.
So they bought a 1,870-square-foot house for $450,000 in a new Rancho Cordova development near Grant Line Road, called Camden at Somerset Ranch.
Even then, they had to get on a wait list for seven months. They got into the home with the help of a military veterans loan, said Nicole, who works at home as a business analyst for Cisco Systems in San Jose.
“We have friends who want to buy homes but are not in position to yet,” she said. “We are one of the first.”
But many young buyers can’t afford homes in new communities or existing homes in desirable neighborhoods like Del Dayo in Carmichael or Land Park near downtown.
That means setting down roots in older, suburban neighborhoods far from the urban core.
High school teachers Poladi and Llorente, who got into their suburban Carmichael home through a teachers’ down-payment assistance program, say living in suburbia is fine. She and her husband grew up in suburban areas of Stockton.
“I don’t have a problem with cookie-cutter homes,” Poladi said. “I think they’re super cute.”
Sacramento-area builders, meanwhile, are scrambling to design new homes and rethink communities to appeal to young buyers.
Greg Paquin, a leading local real estate analyst, has this take: Millennials are looking for “experiential environments,” not just houses. That means walking trails, a dog park, a gathering spot down the street. “They’ll meet friends at a brew house rather than their house,” he said.
Michael Strech of the North State Building Industry Association said builders have stopped putting in dens. “Nobody has dens anymore. They work on their laptops on the couch, on the patio.”
Gabriella Bragoli of Desa Design says she may put a bicycle in the garage or a dog dish in the kitchen and a dog den in the living area. “The joke is millennials aren’t buying homes for their families, they’re buying them for their pets.”
There’s truth in that joke.
Poladi said she and her husband bought their Carmichael home with a backyard for their practice “child,” a Pembroke Welsh Corgi named Coco, as well as the children they plan to have.
“We’re late starters with families,” she said, “The closest we could have is a dog.”
Leyla Jaworski of Design Shop Interiors recently put a baby crib in one room in a model home at The Grounds, an infill development by Reynen & Bardis near the UC Davis Medical Center campus in Sacramento. “You want a young mom to walk in and just fall in love,” she said.
Poladi and Llorente say buying a home was an emotional roller-coaster. They got outbid twice before they found their home. Llorente, who still has a student loan, worries about the finances.
Monthly rent for an apartment in the Arden Arcade area was costing them $1,605. Their mortgage is $2,636.
Still, it was a celebration last weekend when their real estate agent Erin Stumpf handed them the keys. Llorente carried Poladi over the threshold, something he had forgotten to do when they were married.
They “saged” the house for good energy. Then they opened a bottle of Prosecco and let Coco out back for her first romp.