WASHINGTON— For Mother’s Day, flowers and chocolate are nice. But watching your young single daughter take the lead in the real estate market is even nicer.
Sara Barger, 26, plays with her tenant's dog outside the Columbia Heights home she purchased in January, her third buy in three years. Photo credit: Eleanor Goldberg
Unmarried women accounted for 21 percent of home purchases in 2009,while unwed males only bought up 10 percent of the residential market, according to a November National Association of Realtors report. It’s a dramatic shift from 1981, the first year the numbers were tracked, when single women and men each accounted for 10 percent of home sales.
Still, some industry professionals have been slow to take note of the females’ robust activity. Very slow. Single women have held steady at the 20 percent mark for more than five years. Yet, when the Urban Land Institute hosted its annual real estate conference in late April, analysts had to remind the audience to expect big numbers from young, single female buyers.
“I’ve given some of my [home-building] clients lessons on how to be gender friendly,” said Brooke Warrick, president of the market research firm American Lives. He reminded sellers to treat young women as viable buyers, not bystanders, by doing something as simple as handing them a brochure when they enter a for-sale home. His advice to real estate developers: “Make sure to pay enough attention to these women. You want these women.”
These women tend to stake their claim on homes in the 1,700-square-foot range predominantly in the Washington, D.C., California and Texas markets, Warrick noted.
After segmenting the market, Warrick noticed that young women, especially those rooted in secure industries, like health care, make more money than their male peers.
Though not quite rooted in a stable industry, freelance video producer Sara Barger, 26, pursues buying homes as a way to safeguard her net worth.
Earning roughly $90,000 a year, the American University graduate bought her third Washington property in three years in January when she closed on a four-bedroom $350,000 foreclosed townhouse in Columbia Heights. Barger rents three of the bedrooms as well as her two condominiums to supplement her income and subsidize her monthly $5,865.89 mortgage, condo and tax fees. After her rental income, she ends up owing approximately $625 a month, including utilities.
“I think people put way too much emphasis on the long term,” Barger said of the ease with which she approaches purchasing. “You have to look at it the same way as a 401k. It’s a gamble, but its something tangible. At least I can get some utility.”
Relatives contributed $5,000 to Barger’s first two purchases. Her father loaned her $50,000 for the third and she repays him in $1,000 monthly installments. She said that buying properties that “needed work” was one of her strategies, as was working a full-time job throughout college.
Barger’s broker, David Bediz of Coldwell Banker subsidiary Dwight & David, began to see women taking a more active role in real estate five years ago. But he admitted that the company’s 20-something clients are still pretty much split evenly down the gender line.
From the 1920s almost through to the present, though, the predominant female homeowners were widowed seniors, according to Richard Sylla, financial historian at New York University’s Stern School of Business.
Pop culture often suggests otherwise, but women may have taken the lead in home purchases in recent years because of their thrifty habits, experts agree.
“Men are much more interested in consumption,” remarked National Association of Realtors spokesman Walter Molony.
Barger had observed such indiscretion in spending among her male friends, noting that quite a few who have hit 30, are now reeling in the debt they racked up in their early 20s.
“The last three boyfriends I had, I’ve broken up with because they were dirt broke,” Barger shared. “I don’t need you to pay for me. I need you to go out and do things.”
Such a shift is what inspired Amanda Steinberg to establish DailyWorth.com in January 2009, a free personal finance newsletter tailored to teaching women how to manage their money. Steinberg said her readership doubled to 20,000 in the last three months and that their interests lie mostly in protecting their assets. Of the eight topics offered in a recent preference poll, 79 percent of 500 responders checked off “saving” as one they would like to read more about, whereas 45 percent checked off “frugal shopping.”
Steinberg’s pretty sure she knows why her readers are swiping less and budgeting more.
“I think it’s the fact that more and more women realize that a man is no longer the financial plan.”