Becoming a homeowner has long been a part of the American dream. Our parents dreamt of being homeowners and their parents, also. And contrary to popular belief, millennials still want to be homeowners, too. They make up 37 percent of homebuyers. Like generations before them, millennials are causing a noticeable shift in the real estate market, namely, their lateness to the homebuyer party. How much are they changing the housing market, and how does it affect you as an agent? Read on to find out.
Renting Longer, Buying Later
When you look at home pricing trends throughout the decades, it’s not hard to see why millennials are waiting to buy later than their parents. Homes are 39 percent more expensive than they were almost 40 years ago. Today’s average home cost outweighs the average millennial’s income, which means, when they start their homebuying journey, it takes them longer to save up for a down payment.
The high cost of living also means that millennials stay at home with their parents longer, shifting the media first-time buyer age from 29 in 1981 to 33 in 2019.
And student loans are yet another contributor to millennials choosing to rent longer rather than buying. Student loan debt is at an all-time high, with the average millennial shouldering $27,000 of debt. This can lead to them having a harder time taking out a mortgage and feeling wildly unprepared to purchase a home.
Redefining How We House-hunt
Millennials are all about their tech, so much so that they’re influencing the way we hunt for homes. In 2017, the National Association of Realtors (NAR) reported that 99 percent of millennials use online searches to get information about homes to buy. And their device of choice? Phones and tablets. It’s said to directly affect the way real estate agents and brokers approach leads from this generation.
Agents may find changes such as communicating with leads primarily through text rather than traditional phone calls and being less of a resource for information about properties. Other standards, such as being highly valued for their insight on the home buying process, negotiation skills, and networking, remain.
Technology isn’t just being used to find homes; it’s also used to find real estate agents. In previous decades, you searched the yellow pages or happened to luck upon meeting an agent at an estate sale or an open house. Today, millennials do plenty of web-based research and choose their agent and their potential properties based on their findings.
They Love Teched Out Houses
Following the trend of millennials and their tech, this generation loves the idea of smart tech and smart homes. And many agents and sellers already know this. Before going on the market, many older properties undergo tons of remodeling and renovations to incorporate upgrades such as smart thermostats and sleek, yet discreet appliances to attract millennial buyers.
Bonus tip: A few other favorite millennial home details include a great location in short distance excellent school districts and retail, an updated kitchen and bathroom, solar panels, and open floor plans.
Newer Starter Homes
Some homebuyers purchase a minimum of two homes in their lifetime: a starter home and their forever home. When it comes to starter homes, millennials prefer theirs to be a newly constructed home versus one that requires remodeling or renovations to get it to their liking.
This preference was born from the belief that newer homes are less likely than older homes to have pitfalls, allowing them to avoid paying for renovation or plumbing and electrical issues. It’s also believed that newer homes tend to have lower insurance rates.
Another reason millennials prefer having a newer home is that they use it as a stepping stone to their forever home as their families grow and their needs change. While living in their starter home, they want to continue to save money rather than sinking it into a home they don’t see themselves staying in for many years.
They Need Everything Just Right
Another way that millennials are shaking up the housing market is with their research-driven approach to making a purchase. They’re the generation that will spend countless hours scrounging the internet for information. Only after they’ve ruled out all options and found the best one for them, will they decide. Because of their diligence, it can take a few months to a whole year before deciding on a home.
And they won’t settle for anything less, holding out for something that’s what they want before investing. Millennials are minimalistic, and the perfect home has to suit their lifestyle, including details like enough space for pets or starting a garden.
Our advice for agents who encounter millennial buyers is to have patience and help guide them through their journey. It’s a mighty rewarding payoff if your stick with it and close the deal.
They’re Looking to Scale Down
It’s well-known that millennials make wildly different lifestyle choices than baby boomers. And housing choices are no different. With every generation comes a new trend, and according to the Wall Street Journal, that trend is that millennials don’t want large, elaborate, sprawling homes like generations before. Instead, they’re attracted to walkable, smaller, modern-looking homes. They’re less interested in Tuscan-style architecture and ornate details or the home’s size, and more attracted to clean lines, open floor plans, and a home’s quality. The problem is, this shift in design choices makes it harder to sell older homes.
Call Motivated Sellers: Helping You Find Quality Leads
Millennials are shifting the housing market and influencing new real estate trends. If you’re interested in learning how to market to this new generation, our team at Call Motivated Sellers can help. We can vet your list of leads, or help you locate top properties that will attract millennial buyers.
Ready to start your business off strong? Give our team at Call Motivated Sellers a call today!