Millennial Housing Crisis Unfolds As Skyrocketing Avocado Prices Hit All Time High

Tyler Durden's picture

One month ago, an Australian millionaire "discoverd" the cause why US housing refuses to rebound to its pre-crisis levels, and tangentially why Millennials were - at least anecdotally - living if not in their parents basement, then destined to a life of renting: avocado toast. (For a more in depth discussion on Millennials' housing habits, read "Will Millennials Ever Become A Generation Of Homeowners: BofA Has A Troubling Answer").

Tim Gurner, a luxury property developer in Melbourne told 60 Minutes in Australia that young people can’t afford to buy property because they’re wasting money on fancy "avocado toast" and overpriced coffee.

“When I was trying to buy my first home, I wasn’t buying smashed avocado for $19 and four coffees at $4 each,” he said. “We’re at a point now where the expectations of younger people are very, very high.”

He added: “We are coming into a new reality where … a lot of people won’t own a house in their lifetime. That is just the reality.” Asked if he believes young people will never own a home, he responded: “Absolutely, when you’re spending $40 a day on smashed avocados and coffees and not working. Of course.” The 35-year-old executive then offered a point of comparison, describing how hard he worked when he was young.

Gurner was not the first to suggest that young people’s love of avocado toast was making it harder for them to buy homes. According to the Guardian, demographer Bernard Salt wrote in the Australian last year that if young people stopped going to “hipster cafes”, they could purchase property. He wrote: “I have seen young people order smashed avocado with crumbled feta on five-grain toasted bread at $22 a pop and more. I can afford to eat this for lunch because I am middle aged and have raised my family. But how can young people afford to eat like this? Shouldn’t they be economising by eating at home? How often are they eating out? Twenty-two dollars several times a week could go towards a deposit on a house.”

Well, we have bad news: as of today, the price of raw avocado just hit an all time high, and if the gentlemen mentioned above are correct, it assures an entire generation of Millennials will be doomed to rent or continue living in various parental basements.

Among other thing, the record high price has been blamed on soaring demand as American per-capita consumption jumped to 6.9 pounds in 2015, versus 3.5 pounds in 2006, according to government data. People are being drawn to the fruit not just for its taste but also for its healthy oils and fats, a trend borne out in the U.S. by Starbucks Corp.’s announcement last month it’s selling avocado sandwich spread.

“You have increased consumption in China and other areas of the world, like Europe,” said Roland Fumasi, an analyst at Rabobank in Fresno, California. “They’re pulling a lot more of the Mexican crop, so there’s less available for the U.S.”

As Bloomberg reported in April, Mexico supplies 82 percent of the avocados eaten north of the border. Its shipments into the U.S. surged to 1.76 billion pounds in 2015 from just 24 million pounds in 2000, according to data from the Hass Avocado Board in Mission Viejo, California. As a result, in late April a 10-kilogram (22-pound) box of Hass avocados from the state of Michoacan, Mexico’s biggest producer, cost 530 pesos ($27.89). The price was more than double what it was a year earlier and the highest in data going back 19 years.

* * *

Meanwhile, piggybacking on the meme of avocados-as-homeownership-equivalent, SoFi, an online personal finance company geared toward younger moneymakers, said today it would "award" anyone who takes out a mortgage through the service a month's worth of avocado toast, delivered straight to their door. So... take out a mortgage that locks you in for 30 years, but get free avocados for a month.

From the purposefully absurd press release:

SoFi Is Offering Avocado Toast for Buying a Home—Yes, Really

 

Who says you can't have avocado toast if you want to buy a home? Oh, right—an Australian real estate developer who made the comment heard 'round the world about how it's preventing millennials from becoming homeowners.

 

Obviously, buying a home doesn't mean you have to chuck avocado toast out of the picture. In fact, buying a home now comes with avocado toast.

 

What we mean by that is, for the month of July 2017 only, anyone who takes out a SoFi mortgage to purchase a home will receive a month's worth of avocado toast delivered to their door. Buy a home using a SoFi mortgage, and you'll receive an email asking whether you want regular or gluten-free bread. Avocados and bread will then arrive in a series of three shipments—though you'll still need to toast the bread yourself to get the full experience.

 

Why avocado toast? Because with a SoFi mortgage, you don't have to skip out on the avocado toast while saving up for a down payment. SoFi mortgages make it possible to buy a home with just 10% down and no borrower-paid private mortgage insurance required, which could get you into your dream home sooner. It could also make it possible to do that while brunching. 

 

Plus, the SoFi pre-approval process is mostly online and exceptionally fast (paperwork is kept at a minimum). And with flexible debt-to-income limits, SoFi mortgages make it possible to qualify for more financing than you might with a traditional lender. For millennials with student debt, this could be your ticket to a home, rather than opting out of an occasional morning treat.

 

So, want to buy a home and have your avocado toast, too? Apply for a SoFi mortgage, and once it goes through we'll email you with details about sending you fancy breakfast to pair with coffee on your new kitchen countertop. (Instagram filter optional.)

While it remains to be seen if this gimmicky ad campaign is successful in spurring millennial homeownership, even if it means soaring bad debt for SoFi in just a few short year, for now a far bigger threat to the US housing market is how financially challenged millennials will be able to juggle both their favorite bourgeois meal as well as saving up for that down payment or simply staying current on their mortgage.

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ebworthen's picture

Oh hell!  Not the avocados!

How will San Fransisco and Washington D.C. survive!?!?

Whole Foods and Silicon Valley?  Call out the National Guard!!!

tmosley's picture

I somehow don't think the millenials in Oz are spending the $2million that a desert shanty costs at hipster bars.

No, I think they have just (very reasonably) given up.

Kill your central bankers if you ever want to have children.

Stuck on Zero's picture

So true. Fundamentally central bankers are outbidding our young people for homes. Let interest rates float and it would all sort itself out.

Tom Servo's picture

how does one trade this? LOL

 

Mr. Universe's picture

The central banks through their approved corporations are aquiring tens of thousands on rental units, mostly single family homes. It will come to a point where their "free" money will out bid any market buyer.

Son of Loki's picture

I thought Millennials out there just ate organic tofu and bean sprouts?

Creative_Destruct's picture

Solved when the Millenials  "inherit the 'incredible wealth' from the Baby Boomers."

HA! HA! HA! HA! HA!HA!HA!HA!HA!HA!HA!HA!HA!HA!HA!HA!HA!HA!HA!HA!HA!

We BBs be BURNIN' through that shit right NOW back-stoppin'' the lil' Millenial bitches!!!!!!

Back off the Starbucks and the $19 avacado toast NOW or start taking practice runs sleeping under the overpass !!!


stacking12321's picture

My 4 year old avocado tree is producing copiously.

7 avocados the 2nd year
50 avocados the 3rd year
It's in the 4th year and I see 200 little avocados growing on it

youngman's picture

I have three trees and they produce 100s of avocados..I sell some to my neighbors...and my dogs get the ones that have fallen down...

playit's picture

I'm making over $7k a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it. Well, it was all true and has totally changed my life. This is what I do... www.jobproplan.com

Forbes's picture

In another decade you can feed the whole world--from just one tree...

osolomio's picture

Well I just ran out back and planted 350 hass avocado injerto grafted trees.

I will let you know in 3 or 4 years

I hope avocado toast isnt a fad otherwise I may be the toast

fattail's picture

It's not a fad.  Millenials are giving up the shit food their parents fed them.   The boomers are dying of diabetes and their kids will live 20 years longer.    They're going to inherit the house anyways and the 2 fat bastards living upstairs are on their last artificial hips are on borrowed time.  Which is why the millenials still live in the basement.  That's also why coca cola and pepsi are selling more bottled water now than their sugary poison. 

UmbilicalMosqueSweeper's picture

Yeah, but how will the little faggots pay the utility bills and taxes? Give blowjobs to the banksters?

Schmuck Raker's picture

Have a dozen kids; give them guns; become legendary.(Not that you aren't already T-Mo)

The central planners's picture

Time to make an avocado cryptocurrency. AVOTHERIUM wat you guys think?

realmoney2015's picture

Maybe, just maybe it's the student loan debt and the near worthless degree us millinieals are left with. Lesson learned...no more assetless debt. 

Son of Loki's picture

Millennials in the Workforce, A Generation of Weakness - Simon Sinek

https://www.youtube.com/watch?v=QXWNChoIluo

espirit's picture

I can live without avocados -or- cryptos.

Lost in translation's picture

National Guard?

No, this is a crisis only NATO can handle.

JuliaS's picture

Soon these kids won't be able to afford a downpayment on an avocado.

SHEEPFUKKER's picture

Avocado toast or an ounce of silver?

xrxs's picture

Avocado toast is all that.

Lost in translation's picture

I've eaten beans on toast for some years now. Not sure if there's a real estate index for that.

Juggernaut x2's picture

Avocado is a ghetto-assed Mexican food

. . . _ _ _ . . .'s picture

Lobster used to be poor man's food.

. . . _ _ _ . . .'s picture

Feeding on bottom feeders... maybe not the best idea.

Stormtrooper's picture

The silver is kind of hard to chew.

osolomio's picture

Jeesus man its agood thing I am around once in a while

You DRINK silver

healthy 

beyond comprehension

FoggyWorld's picture

Too much of that and your skin turns grey.

Lucretius's picture

Too true! That happened to a former sister in law, some quack "Dr." gave her way too much colloidal silver and she did if fact turn an ugly dead looking gray color. Karma's a bitch that way...

She was ugly to begin with, on the inside. Even with a boob job, I would have never thrown a hot dog down that sewer! Her sister was bad enough!

venturen's picture

In other news...Goldman Sachs owns all avocado brokers and has cornered the market...using unlimited free money from the FED

Juggernaut x2's picture

Goldman is driving up avocado prices by stockpiling it in Detroit warehouses like they do with aluminum 

Akzed's picture

Or is it... aluminium...?

totenkopf88's picture

That's if you're a Brit. They use a lot of aluminium in Jaguwire saloons now

Mr. Universe's picture

Don't see too many broken down new cars in the middle of the road now days. Today was an exception, a brand new XF.

Schmuck Raker's picture

It looks like pesto to me, yum.

Akzed's picture

I barely heard of avocados, let alone avocado toast. I heard of toast.

in4mayshun's picture

Avaocados...otherwise known as Guacamole. Don't tell me you've never heard of guacamole-every town in America has at least 2 Mexican restaurants

cognitive dissident's picture

Thank goodness they are still tracking the all-important ''avocado indicator'' here at ZH...

venturen's picture

Elon Musk just annouced he will grow Avocados on mars using a reusable space ship....tesla stock doubles

Rusty Shorts's picture

*AvocadoX- I think this is the great example of why so many pin their hopes on the "as-yet-unknown-future-technology-fix". We just pop together the as-yet-unknown free energy device into the as-yet-unknown spaceship and fly to the as-yet-unknown destination and *wham!* populate the galaxy.

meditate_vigorously's picture

Are you trying to infringe on my patent? That was EXACTLY my idea.

Lucretius's picture

"and *wham!* populate the galaxy."

and *wham!* infest the galaxy.

There, fixed it fer ya!

Grandad Grumps's picture

A bag of beans and avocado seeds to grow my own trees, less than $10. I have 5 trees now.