When Michael Berry first moved into Tampa's Madison at Soho condos, he liked being smack in the midst of the lively bar and restaurant scene on South Howard Avenue.
That was two years ago. Now Berry is 26, about to turn 27. So is his fiance, Alicia Kais.
"We've had our fun here, but it's a little loud, a lot of college students,'' Berry says. "We're slowly growing out of that.''
So Berry and Kais are starting to look for a house, one with room for their dog, Pickles, and Berry's 19-foot boat. In doing so, they are joining thousands of others in their generation in a quest that could revolutionize America's residential real estate business.
For decades, baby boomers — those born in the prosperous years after World War II — have made up not only the nation's biggest population group but also the bulk of its home buyers. But they are being supplanted, both in sheer numbers and in the hunger for home ownership, by millennials between 18 and 34.
In a realtor.com survey of Americans who expect to buy a home in 2017, more than half were first-time buyers. And most of those were millennials.
"What we found is a true sea change in the buying population that will affect which homes and neighborhoods are the most desirable in 2017,'' the company said.
As millennials get older and think about starting families, they want the same things that baby boomers traditionally have sought — more space, safe neighborhoods, good school districts. Half of millennial buyers want to live in the suburbs, the same percentage as baby boomers, and both groups prefer single-family homes to townhouses and condos.
Millennials, though, can be pickier than baby boomers.
"A lot of time their sense of expectations tends to be a little above their income level,'' says Rick Deaton, a ReMax agent in Wesley Chapel. "They have the budget for a Ford Escort and their eyes on the BMW 5 series.''
Though some millennials are too burdened by student loans or other debts to afford a house, others will enter a market that in many ways is good for buyers, especially first-time buyers. Interests rates are historically low and FHA loans require only 3.5 percent down.
Plus, "more and more programs are available on the financial side — that allows them to get into housing,'' says Charles Richardson, senior regional vice president for Coldwell Banker.
But millennials, particularly in the Tampa Bay area, are house-hunting at a time when the number of homes for sale has rarely been so limited. High demand coupled with low supply means millennials can find themselves in fierce competition with other buyers for nice, affordable houses in popular areas.
Chris and Shelby Groner, both 24, know that well.
Recent graduates of the University of South Florida, the Groners had been renting a 720-square-foot apartment in South Tampa. That was getting cramped so they started looking for a house last spring.
The couple did everything by the book. They had saved money during their college years working at Loft and Abercrombie & Fitch. They both had good jobs — he with a software company, she as a teacher in a charter school. They were pre-approved for a loan and set themselves a top budget of $200,000.
"We probably could have done more but I don't want to be house poor,'' Chris says. "We still like to take vacations and go out to eat and I didn't want to be stressed out.''
In their price range, though, the selection of desirable places proved slim.
The Groners initially thought about Seminole Heights, one of the bay area's trendiest neighborhoods. But "the homes are older and when you go inside, you never know what's behind the walls,'' Chris says. "It was a little scary.''
In nearby Tampa Heights, they checked out a house that inexplicably lacked a connection to the city water system. "We ran away from that one," he says. They nixed another house because it was too close to the railroad tracks.
Much better was the house near Lowry Park with a pool and updated kitchen, but it drew almost a dozen offers. And they were so smitten with a place in Carrollwood Village that they wrote the seller a letter and even attached a photo of themselves with their rescue dogs, Sassy and Harley.
"When we lost that,'' Shelby says, "we were really depressed.''
Finally, they found it — a 1,400-square-foot house between Northdale and Carrollwood listed at $189,900. To make sure they got it, they paid $10,000 over the asking price. But they stayed within their budget, barely, and they love the house.
Their advice for millennials just starting their house hunts?
"Don't bite off more than you can chew,'' Shelby says. "It's easy to look at the price and think, 'it's easy to swing that, it's only a little bit more.' But if something happens, if the dishwasher or washer or dryer goes out, you need to have a buffer.''
That's smart advice, though millennial buyers don't always follow it.
"One thing we've found is that they are willing to pay the very top of what they can afford if they can get the things they want — solid surface countertops, nicer cabinets, no carpet,'' says Deaton, the listing agent on the house the Groners bought. "What they don't want is to come into a home and start pulling even a couple of thousand dollars out of their pocket (for renovations) because usually they don't even have that.''
At 28, Deaton's daughter is a millennial. She and her fiance are about to close on a small but move-in ready house that Deaton found for them in Zephyrhills. Expecting multiple offers, they agreed to pay $1,000 more than the $124,000 list price but asked for the seller to help with closing costs.
"The amount of money it takes to get into a house is not cheap,'' Deaton says. Even with a 3.5 percent FHA loan, he notes, the downpayment on a $200,000 house would be $7,000 plus $8,000 to $10,000 in closing costs.
"If (millennials) have that kind of money,'' Deaton says, "they're leasing BMWs and taking cruises."
Natalie Wetherington, an agent with Tampa's Tomlin St Cyr & Associates, agrees that millennial buyers often have desires bigger than their bank accounts. She also has noticed that they can spend hours driving around looking at houses or searching on zillow.com and realtor.com, yet are slow to act when it comes to putting in an offer.
"They seem to find it hard to make decisions,'' Wetherington says. "They don't understand that if I like something I must pull the trigger. They don't seem to be as confident in moving forward as quickly as people who are older.''
That can be particularly true of millennials who are first-time buyers. But of the millennials who expect to buy next year, 22 percent already own property. Among them is Berry, who is deliberately going slow until his Tampa condo sells.
A graduate of the Massachusetts Maritime Academy, Berry is chief mate on a ship that services oil rigs in Brazil. He spends a month on the ship, then a month at home in the condo, which has become too crowded for him, his fiance, Kais, and their 40-pound dog.
"We're just ready to get out of here,'' he says. He and Kais, a graphic designer who plans to start her own clothing line, especially like Dunedin.
"It's got a great little downtown, it's very friendly, it's very dog-friendly and it has a marina,'' Berry says. "It's kind of a hidden gem."
That is right on all but one count. Once-hidden Dunedin is now one of the hottest places in Tampa Bay — for millennials and baby boomers alike.
"We're going to try to shoot for something in the $200,000s,'' Berry says. "But Dunedin is a tough market."
Susan Taylor Martin can be contacted at [email protected] or (727) 893-8642. Follow @susanskate