Millennials are a constant subject of study for every industry and we often hear overarching claims about what this demographic does and does not want. If you have ever heard the phrase, "Millennials do not want to buy homes," you are not alone—we all have. The problem is that this is not actually true.
A recent study found that 89% of Millennials do, in fact, want to buy a home; however, they are up against financial hurdles that previous generations did not face.
With that in mind, how do we approach the Millennial real estate market? Millennials make up the largest generation in America, which means that we are going to need to understand how to approach them about buying a house.
Read on to learn ten facts about the Millennial approach to real estate that shouldn't be overlooked.
1. Millennials Don't Have the Disposable Income of Previous Generations
Why have so many people believed that Millennials did not have any interest in buying a home? This is likely due to the fact that most people in this age group are not purchasing their first home at the same age as their parents did.
The fact of the matter is that Millennials do not have some of the same advantages that their parents did. Many are swamped with student loan debt and the job market is not nearly as forgiving as it once was. As a result, we are seeing delays in when these young adults actually have the funds to buy a home.
That being said, older Millennials are starting to reach the point where they have enough savings to start investing in real estate. As a result, it is more important now than ever to start paying attention to the Millennial real estate market.
2. Millennials Prioritize Location
One trend that we are seeing with Millennials who are purchasing their first homes is that they prioritize location. Many of them want to be close to work to avoid a long, grueling, and costly commute.
Millennials also tend to prefer to live closer to their pastimes. That means that we are seeing an increased demand for urban or metropolitan housing.
What does this mean for you if you are trying to sell a home in a more suburban or rural area? Make sure to emphasize any nearby attractions in your listing. You and your agent should research the local job market as well as potential growth in things like restaurants and public events so that you can sell not just your home, but your location.
3. Millennials Are Going Smaller and Older With Their Home Buying
For older generations, new housing is usually the most appealing. Over the past few decades, developers have built large new homes and luxury communities to accommodate these desires.
Because Millennials are usually working with a smaller budget, they tend to lean toward homes that are more affordable. This particular market includes homes that are smaller, older, and possibly even in need of more work.
4. Many Millennials Don't See a Purchased Home as a Lifelong Residence
Remember, Millennials prioritize location. Out of necessity, work has to come first, which means that if a Millennial homeowner is offered a new and better job in a new city, they are likely to sell and relocate in order to take the job.
When Baby Boomers and Generation X started purchasing their first homes, many viewed homeownership as a sign of permanence. At the very least, they anticipated living in their home for a good 15 to 20 years.
Many Millennials see homeownership as something more fluid. They may not look for their dream home the first time around. That means that sellers may want to start shifting their pre-sale renovations toward function rather than luxury.
5. Millennials Go Online First
Millennials are the first generation to come into adulthood well-versed in the digital world. Most Millennials are more comfortable starting their real estate search online, rather than in person.
What that means for sellers and their agents is that having a digital footprint for your listing is of the utmost importance. In fact, if you are working with a tight marketing budget, you may want to start shifting away from traditional tactics and adopt digital tactics, instead.
In other words, hosting a weekly open house is not the way to snag the attention of Millennial buyers. They are not the ones driving around their desired neighborhoods looking for "For Sale" signs. Instead, focus on your digital marketing and make sure that your home is coming up in search engines.
Having a 3D tour of the house is a great way for people to get a feel of the home and the space before scheduling an in-person meeting to see the house. That way, they will only contact you if they are really serious about a property.
6. Millennials Have High Standards for Digital Presentation
Putting together a basic online listing is not enough to impress this group. Many of them have a working understanding of at least basic photography, graphic design, and other digital aesthetics. They have also grown accustomed to polished, high-end advertising on social media and other platforms.
First, master the art of the first impression. In order to keep Millennials looking at your listing long enough to generate interest, you need to impress them off the bat. For these tech-savvy individuals, that first impression is about 94% design-related, which means that low-res photos and poorly formatted listings are a no-go.
Second, you want to make sure that you are providing as much information as possible in your listing. That is why Hommati has embraced the future with our real estate listing technology. We utilize 3D virtual tours, virtual staging, and drone aerial footage to make sure that your listing comes to life online.
7. Millennials Are Cautious With Their Spending
The way a generation spends their money typically speaks to the state of the economy in their formative years. Millennials maintain a recession mindset and are very cautious with their spending habits. While we once assumed that this was the "entitled" generation who spent their money poorly, we have come to realize that this is not the case.
Millennials have a lot of obstacles to overcome when trying to save money. That means that they are not attracted to flashy price tags and are less likely to view something like a home as a status symbol. They also know how to do their own research to make sure that they are not overpaying for what they purchase.
If you are hoping to tap into this massive market, make sure that you know the real value of your home. We use our market research and pricing tools to ensure that you don't underprice or overprice your home.
8. Older Millennials Are Interested in the Suburbs
Fortunately for suburban homeowners, not all Millennials want to live in the city. Millennials were born between 1981 and 1996. That means that the older Millennials are now in their 30s and entering their 40s.
These older Millennials are showing greater interest in suburban neighborhoods. Those that have children tend to consider their proximity to a good school just as important as their proximity to work.
9. Other Life Decisions Influence the Way Millennials Invest Their Money
Trying to understand Millennial real estate decisions requires that we look past money, jobs, and general interests. Other decisions are also impacting how and when this demographic approaches the real estate market.
Let us take a look at this demographic study conducted by Pew Research. Glancing through these statistics, you will find that 45% of Millennials do not live with their own spouse or child(ren). That means that almost half of Millennials live alone, with parents or other relatives, or with non-familial roommates.
This same study shows that Millennials are getting married less frequently and later in life. The same trend goes for having children.
All of these factors affect the likelihood and timeframe of a first home purchase. Like their predecessors, Millennials often consider homeownership when they are married and they are even more interested if they have or plan to have children.
10. Millennials Constitute the Most Influential Force on the Market
All of this information may seem contradictory to the idea that you would want to target Millennials with your home sales. They may have a lower income, more specific location desires, non-traditional approaches to house hunting, and less interest in luxury homes.
However, Millennials also constitute the most influential force on the market. They make up the largest age group in the workforce and have reached the age where buying a home is more pressing. While selling to Millennials may require rethinking the real estate market, this shift is necessary to keep the real estate market afloat.
Tap Into the Millennial Real Estate Market
For over a decade, economic experts misunderstood the Millennial real estate market. In fact, many assumed that there was not a Millennial real estate market, at all. Now, we recognize this generation's desire for homeownership and it is up to us to adapt to their needs and approaches when it comes to buying a home.
Hommati remains on the cutting edge of real estate sales and marketing. We provide the latest information for our agents and develop high-quality, modern listings that stand out from the pack. If you are an agent who is ready to embrace the future, enroll now in our services.