10 Ways Millennials are Changing Real Estate Markets
It should not be a surprise that millennials are changing real estate markets because many are very methodical and research-driven when it comes to buying a home. It is also extraordinary how their behavior influences today’s real estate markets, causing quite the generational shift. According to the National Association of Realtors (NAR), those 36 and younger make up the largest percentage of buyers (34%) in the United States.
Other generations can only envy millennials for being informed and well-aware of what they want. Many would say that it is because they grew up during the boom of Internet technologies, but it is actually due to their knowledge of how to use these technological improvements in everyday life that they are so savvy about almost every aspect of their lives.
Here are several key ways millennials are changing real estate markets around the country.
Millennials Know What They Want From Their Future Home
While local economies are steadily improving, options to help with adaptation and renovation of a new home can still be tricky, especially for many who are recently out of college and have student debt. Many millennials overcome this by looking for ready to buy houses, namely with updated and functional kitchens and bathrooms. Homes with open floor plans, home offices, and technology upgrades are also sought after.
The location of the property is also something they will pay close attention to. Many will even try to find future homes which are environmentally friendly and equipped with advances like solar panels, for example. According to a recent Zillow Consumer Housing Trends report, only 11% of them plan to call this first home permanent, while 68% see it as a future means to get the home they really want.
Location Is A Matter Of Convenience, Not Stature
Millennials will choose smaller homes if that means they will live closer to urban areas and places of work and study. Many of them are content working at home, and they like to spend their free time in recreation, so nature and open spaces need to be close and convenient. They also try to reduce the carbon footprint, and many are cycling and walking whenever they can, so it is important for them that their new place accommodates to that.
For many in this generation, their ideal setting is to find a cost-effective place, which will save them from expensive living conditions, and yet be close to farmers’ markets and coffee shops. Living close to things that are important to you is certainly a smart approach.
They Want Technologically Advanced Neighborhoods
Having an Internet connection is not unusual today, but millennials take it further by requiring the best signal and conditions. They want homes with the latest technology in absolutely everything they can afford, inside and out. Starting from interior smart appliances with built-in Wi-Fi from refrigerators, TVs, washing machines to easily controllable heating, and cooling with one swipe of their fingers.
The exterior often includes solar panels, rainwater collectors and low maintenance roofing. Moreover, they are savvy about finding options that fit their needs. Did you know, according to the NAR in a recent buyer/seller generational trends report…
66% of millennials cited quality of the neighborhood as a major influence why they bought a home there.
Sellers Want To Sell To Millennials
Research shows that of all first time buyers, over 60% of them are millennials. Add in that they account for a third of overall home purchases, and they are a buying force that sellers need to understand and adapt to. That is a big reason why today’s market is trying to meet their extensive requirements.
It is no wonder many home sellers are now making all the necessary repairs and improvements before listing. They even go as far as to make their homes energy efficient and environmentally friendly, as well as upgrade their appliances and install smart features. Millennials are prepared to do extensive research online just to buy the perfect thing at the best price, and buying a home is no different for them.
They Include Their Parents In The Process
The most peculiar behavior on the real estate market today is that many local real estate agents are both fascinated and sometimes confused with the buying process when dealing with millennials. Namely, millennials are the ones with wishes, requirements and information, but when it comes to closing the deal, some sellers have to do business with their parents.
It generally comes down to economics. Many millennials have to borrow or get a home gift down-payment from their parents to get a loan in the first place. There is nothing wrong with that, but it does add another layer to the real estate deal that is not often found in other generations.
Millennials Look For Affordable And Modern At The Same Time
Studies show that millennials state as an absolute must for their new homes to come with completely functional and modern kitchens (the assumption is they like to both entertain and cook). In many instances, they will bypass a larger bedroom in lieu of more space in areas they will utilize more often during waking hours.
They prefer hardwood floors to rugs, like pet conveniences, and love open spaces so they can entertain guests. The bathroom is also important to them, especially if it has been upgraded. For many millennials, their idea of a perfect home is to be affordable and modern at the same time, even if that means buying a smaller home.
They Are Looking For Stress Relief Environments
Wisely, many will use moving services to take all the unwanted furniture and appliances and not be bothered with it themselves during a move. They will use eco-friendly solutions like Boomerangboxes to protect their belongings while moving. They want to save their money for travelling or important hobbies, so extreme and costly home makeovers are out of the question for many of them. Move in ready is what many seek.
This behavior goes hand in hand with their desire to live in less stressful environments with quieter atmospheres. If they do not work from home, then they want to buy homes where they will not have to commute long and preferably without busy traffic. They are very active and their time is precious to them, so they want to spend it the best they can and not waste it.
Generation Y Are Picky And Careful Buyers
Millennials will often take their time when purchasing a house since they want everything to be just the way they envisioned it. It can take months until they find the perfect property and can involve several trips back to the home to check and double-check features they like. Ideally, it would be great if they found what they wanted on the first day looking (some do), and even with the first home they see, but having a bit of patience with millennial buyers will serve sellers well.
While this approach can be a bit frustrating for agents and a time drag for sellers who are being accommodating as possible (after all, they do want to sell the home!), this methodical approach is actually making the local real estate market better as sellers are ensuring their homes are better prepared and equipped for millennial buyers. The end result for sellers is the potential for an increase in the homes value and a higher selling price.
They Do Their Research Online
Before advertising the property, make sure that everything you publish online is true and accurate. This should always be done as a matter of principle, but it is especially important because millennials will have done their research and will spot something that is incorrect or dishonest.
According to the NAR, 99% of millennials will search for their potential homes online (compared to 89% of boomers and 77% of the silent generation).
This means they will check all the facts you stated before even considering to setup a viewing. Also, due to their keen online investigative skills (many are social media wiz’s), both agents and sellers should be prepared to answer a lot of questions not only related to the structure but also to plumbing, electricity, neighborhoods and a wide array of other property details. The better prepared you are, the less surprised you will be when they want to know finite details about the septic tank, crawl space, circuit breakers, and even the backyard workshop.
It Matters Who Takes The Pictures Of The Property
Long gone are the days when the only marketing was putting a sign in the yard and hoping a buyer sees it and stops to view the property. It is also not wise to take photos that are not crystal clear and show the best features of the home. Nowadays it is wise to put forth the effort and have a professional photographer take shots of your home if you want it to get noticed and stand out.
Millennials expect to see the best possible versions of the properties they are considering before coming to preview the house, so attention to detail with your photography (lighting, light staging, etc.) is a smart move. It is also a good idea to use drone technology to show the topography and outside details of the home, land, and surrounding area.
What you do not want to do is employ trickery and edit the photos to make your home look better or bigger than it actually is. There are fewer ways to quickly lose credibility with buyers. Promote your property honestly and let potential buyers see the home for what it is.
Final Thoughts On Millennial Buyers
Every generation has its perks and characteristics, and markets must keep up with the evolving tastes and needs of their consumers to thrive. Millennials are the current trendsetters when it comes to a big portion of consumer goods, and that includes big purchases like real estate.
They are smart and savvy which means homeowners and agents must adapt their approach and style to keep up. In the end, sellers will have a better product (a well maintained and updated home) to show which is great for market growth. With the iGeneration (Z’s) next on the real estate horizon, we all must continue to evolve, or run the risk of getting left behind.
Additional Millennial Real Estate Resources
Key Millennial Market News via the NAR
Millennial First Home Buying Guide by Wendy Weir
Gen Y Home Buyer Tips from Bill Gassett
Top Real Estate Buyer Resources at list.ly
How to Market A Home to Millennials via Zing!
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