Between 2018 and 2023, millennials in California navigated a housing market that shifted fast and often.
They saw prices spike, interest rates rise, and remote work unlock new possibilitiesand new complications.
Some chased bigger homes in farther-flung suburbs, while others downsized or snagged second homes in vacation towns.
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In Californias expensive metros, detached houses often cost well out of reach for first-time buyers.
By mid-2023, the statewide median price for a single-family home hovered around the $800,000+ range.
Its no surprise that many millennials have needed to explore alternatives.
These attached units tend to be significantly cheaper than detached houses in the same city.
Alternative Housing Options
Other property types have also played a role.
Some millennials have stretched to buy fixer-upper older homes or even small multi-unit properties.
In short, California millennials have proven willing to consider a wide spectrum of property types.
On the other end, a few have had to downsize or step back due to economic pressures.
In fact, one hallmark of this period was a wave of move-up millennial buyers.
Historically, younger sellers often list their homes because they need more space or are relocating for jobs.
Several factors enabled this upsizing trend.
Crucially, record-low interest rates in 20202021 made larger homes more attainable on a monthly-payment basis.
Many millennials took advantage of 30-year mortgage rates in the 2.7%3% range.
The Remote Work Effect
Remote work also played a big role in upsizing.
Those millennials who had the means didnt hesitate to seek out larger homes with additional space.
However, a subset of younger owners also downshifted during 20202023.
In other words, high costs forced some millennials to adjust expectations downward.
However, this secondary-home craze cooled off significantly by late 2022 and 2023.
Regional Differences: Where Are California Millennials Buying?
California is a huge state with very diverse housing markets.
This made traditional homeownership extremely challenging for first-time buyers.
Many Bay Area millennials remained renters longer or looked to buy condos/townhomes rather than single-family houses.
Many who grew up in L.A. found themselves looking eastward for relief.
During 20182023, this pattern intensified.
The state capital Sacramento emerged as a top destination for migrating Bay Area millennials.
By 2023, Sacramento was actually the #1 destination for Redfin users moving out of the Bay Area.
That price difference is staggering, and many young families decided it was worth it to relocate inland.
The Great Exodus
Meanwhile, some regions saw millennials leaving.
High rents and home prices, combined with remote work flexibility, pushed millennials out.
Many went to the places mentioned above (Sacramento, etc.
), some left California entirely (popular out-of-state moves included Texas, Arizona, Nevada).
City Stayers and Returnees
On the flip side, not all millennials fled the big cities.
This illustrates that regional moves were not one-directional; some pandemic relocations proved temporary.
Instead, after a brief pause, it exploded.
Starting around mid-2020, California home sales and prices took off at a pace not seen in years.
This price spike was truly unprecedented.
Indeed, the pandemic homebuying wave saw a lot of pent-up millennial demand released.
Millennials often found themselves in fierce bidding wars.
Homes were selling within days, often above asking price, with multiple offers.
It was common for first-time buyers to be outbid by older buyers with cash or investors.
This was frustrating for many millennials.
The low rates enticed them, but the speed of the market was harrowing.
This shift fundamentally changed housing choices.
Remote work also led to a repurposing of housing needs.
Interestingly, remote works impact on affordability was double-edged.
By the end of 2023, many employers were calling workers back at least a few days a week.
The big question is whether those millennials who moved will stay put.
This effectively slammed the brakes on the housing rush.
For millennials who hadnt bought yet, 2022 felt like the door to homeownership suddenly swung shut again.
Many were priced out as the same home now cost hundreds of dollars more per month in financing.
The number of first-time buyers plummeted as 2022 went on.
Delayed Homeownership
Millennials as a cohort were slower to become homeowners than previous generations.
Job losses and low savings meant delayed home purchases.
As a result, the median age of first-time buyers increased.
In 2008, first-timers were typically around 3032 years old; by 2017 it had crept into the mid-30s.
By 2022 it jumped to 36.
That gap widened from 2008 to 2023.
Market Conditions Then and Now
The late 2000s were defined by a housing crash.
Home prices in California plummeted around 20082011, which ironically made homes more affordable for a few years.
Millennials in that era lost out to these deep-pocketed buyers frequently.
In fact, from 2014 through 2021, millennials were the largest generation of homebuyers nationwide each year.
They peaked in 2021 at 43% of buyers, as many finally jumped into the market.
Millennials also started forming families in larger numbers in the latter period, driving demand for family-friendly housing.
But the comparison makes one thing clear: the affordability crisis in California has only deepened.
