The largest generational group proves to be the most challenging to define when it comes to real estate; there are a lot of misconceptions when it comes to the general ideals, wants, needs for the future decision makers of our world, and real estate trends are no different. While us millennials still entering the real estate market, there are overarching trends, and priorities the majority hold true when it comes to home buying; don’t underestimate our interest and miss the opportunity to tap into this growing market.
You may have already realized that a “millennial” is in fact writing this article, as an added first-hand perspective. While Generation Y may have been slow to enter the market, we are buying! Those born between approximately 1982 & 2000, made up 35% of the home buyers in 2015, up 3% from the year prior. With many obstacles looming over most like major student loan debts, buying a home is still a goal many young people want to achieve – minus the romantic approach. As opposed to buying a home to grow old in, we’re much more apt to purchase prior to marriage or engagements, recognize short term investment opportunities, and flip it before moving on to the next one. Through the process, there is method to the madness with our approach, and also general characteristics that we tend to look for in real estate – let’s explore.
The average age of marriage continues to increase, and establishing successful careers are important to our generation; with high marriage costs, and a desire to have children later on, puts an emphasis on buying a home prior to livin’ “the family life”. Recent Redfin research shows that 38% of millennials would delay a wedding/honeymoon in order to buy a home.
We want something to make our own. Okay, maybe this part is still romanticized, but we want something that’s ours and can represent who we are; purchasing a home reflects the hard work, time, investment, and personality of the purchaser, and that makes us feel good.
While financial returns aren’t the top reason for purchasing, we hold it to be an important benefit. We recognize the investment and the opportunity to make improvements, and sell it a few years later. We may purchase our first home in a walkable, urban setting, and 4 years later buy a slightly nicer property in the suburbs with our gains; there’s understanding in the fact that real estate can evolve with where we are in our lives at the moment – one purchase won’t meet our needs for the next 50 years, like generations sought before us.
We grew with the digital age and are completely and totally invested in the digital age – meaning it’s essential to reach us online. Connect, impress, and leave us wanted more. Digital branding, appearance, and forward thinking mindset is important to us throughout this process; we want things to be straight forward, direct, and relatable. 90% of us found our home online first, while 71% used a mobile device to search – meaning if your website isn’t mobile-friendly, or Property Site isn’t modern and available, then you’re out of the running.
Lastly, we’re stubborn. We know our financial limits, and with the current real estate landscape, Gen Y’ers have a unique obstacle to overcome – cash buyers coming in to buy over asking. In many cities and locations, the relatively few supply of listings coupled with high buying interest leads to bidding wars more often than not, with the winner dropping a bag of cash at the end. Saving for a down payment is challenging for any generation, but add on crushing student loan debt, and the fact that most millennials are not able to pay with cash, requires us to play the waiting game. There may be some wiggle room in the budget, but our ceilings typically remain firm, and we’re willing to go through the process of multiple bids until our time comes.
Location, location, location. Whatever our preference, this typically is the biggest determining factor; is it a neighborhood we like? Is it close to work or will I have to commute? While urban purchases declined from 21% to 17% for millennials in 2015, a high walkability score is still important. The location has to make sense in relation to work, and if it affects our commuting costs.
We like shiny, new, easy things. Okay, maybe that’s an exaggeration, but new fixtures in kitchens and bathrooms are big plusses; remodels and newer constructions are incredibly appealing because it’s easy upkeep and low maintenance. Hardwood floors, granite countertops, and newer features mean less money we need to put into it, and less time investing in cleaning, remodels, or things that keep breaking.
Open floor plans are ideal for our entertaining tendencies; we like to play host and big kitchens with open space is ideal for cocktail happy hours and dinner parties.
These house-hunting mindsets, and home characteristics are just a general overview of the Gen Y approach to home buying, and as the group matures and more enter the real estate market, these ideals will only continue to evolve. Be aware, open-minded, and adapt to the ever changing environment; let your business grow with the digital age and innovation as the driving force.
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