Hashtag. Selfie. On fleek. Netflix and chill!
Sound familiar? They are, indeed. These are words dominating all sorts of media platforms these days…trendy terms by the most dominant generation in the land today. And quite frankly, they are today’s real deal…the Generation Y, more commonly known as the millennials!
We have talked about the growth of home prices and the status of the housing markets. That’s right, our next real estate trend is about who are buying homes these days, who make the demands and who control the trend. And once again, millennials took the spotlight as the largest group (38%) of home buyers according to the reports last year. Real Estate IQ brings you a whole new perspective in real estate investing. As a highly qualified real estate marketing intelligence company, we adjust to the pace of our clients. Our system tools and services are more than equipped to match the requisites of the largest industry players of today’ market.
Changing the Game
In a housing market poised for changes due to the pandemic aftermath in the second half of 2020, baby boomers and Generation X are expected to hang on to their homes, while millennials are likely to use their purchasing power to drive demand. According to Realtor.com’s 2020 housing market report, millennial homebuyers are the biggest trend to watch this year. This puts millennials on track to outpace both Gen X and boomers, who are expected to account for 32 and 17 percent of total mortgages respectively.
Millennials are the largest share of home buyers today, and they appear to be targeting certain metro areas for homeownership. As states and cities begin to reopen and live the new normal, millennials will play a game-changing role in the housing market’s fast recovery.
This is a surprising note for the housing market, which previously operated under the impression that millennials didn’t have the same purchasing power as their generational predecessors. Housing industry experts are discovering that millennials in 2020 are moving away from apartment rentals in urban city centers in favor of owning suburban single-family homes.
Among the largest 100 metro areas in the country, NAR has identified the top 10 millennial housing markets, factoring in current housing affordability, local job market conditions during the coronavirus outbreak, the share of millennials already living in the area, and inventory availability. And the good news is two out of ten are from the Texas region namely: Austin-Round Rock, Texas and Dallas-Fort Worth-Arlington, Texas.
As more millennial home buyers enter the market, they’re also reshaping the industry. Millennials are tech-savvy, environmentally conscious and expect top-notch service from their realtors. The easiest way to spot a millennial home buyer is through their most obvious bread and butter….social media! They can’t wait to post a picture of their new home on Instagram, Facebook, Twitter and all other social media platforms. In order to meet the needs of this emerging market, it’s vital to understand what millennials are looking for in a home this post-pandemic 2020.
Cost-Efficient. The truth is, millennials in 2020 are looking to buy. They’re willing to purchase smaller homes and not much at all interested in using their homes as a status symbol. Instead, they’re striving to make homeownership more affordable and convenient. To a large extent, that means millennials are looking for homes connected to the internet of things (IoT), with optimum energy efficiency and environmentally friendly features.
High End Features. Millennials are obviously living interconnected lives. They embrace technology at its finest. After all, they’re the first generation that grew up with it and made technology an integral part of their daily lives. It makes sense that they would also expect technology to be integrated into their homes. Millennials care about being able to check on their homes, lock their doors, monitor security cameras and respond to alarms for safety even when they’re away from home.
Energy and Resource Efficient. Millennials know that energy-efficient homes are better for the environment and their budget. They are looking to reduce their carbon footprint while also paying less for heating, cooling and other utilities. Since millennials care about environmental issues, they’re also concerned about conserving natural resources. To that end, they prefer homes built with materials that are also good for the environment. Some of the top energy- and resource -efficient features millennials look for include:
· Locally produced building materials
· Certified sustainably harvested building products
· Construction components made from recycled materials
· Efficient Natural Lighting and Thermal Efficiency i.e insulation rated higher than building codes require
· Renewable energy sources that offset traditional energy consumption i.e Energy Star-rated appliances.
Low Key Maintenance and Sustainable Design
There’s a pretty even split between millennial homebuyers who aren’t interested in buying fixer-uppers and those willing to do so to help make the most of their budget. Do you know one thing that’s true across the board? Millennials want low-maintenance homes. Sleek appliances, open floor plans, and manageable square footage are features that appeal to millennials in 2020.
Although millennials are careful regarding their spending, approximately 73 percent of them are willing to pay more for sustainability in all areas of life, from personal products to homes. This generation is driving the demand for sustainable homes in America and around the globe.
While many millennials will consider buying a home that needs work, a good percentage of millennials would rather buy new construction in order to avoid spending time and money on renovations. It makes total sense. After all, millennials are busy, with many of them just starting out in their careers or newly married and starting families. These buyers prefer to purchase new or nearly new homes that come equipped with everything they care about most, including updated bathrooms and kitchens, relatively new appliances and disaster-resistant building materials.
What Millennial Buyers Mean for Sellers
We can summarize it in three words: Know your buyer. Real Estate IQ acknowledges the fact that millennials are paving the way to a new door for real estate investing. They are the technologically capacitated generation and should therefore be given the same advance real estate investing experience.
In a nutshell, millennials are internet savvy and more often than not, do their research before house shopping. Here are some tips and reminders in dealing with them:
• Upgrade your online listing. Virtually all millennials (98%) use the internet for their home search—and 78% of them found the home they purchased on a mobile device last year. So, make the best possible impression on the internet by investing in high quality listing photos. You might even need to take video footage to give potential buyers a digital tour of your home.
• Highlight the perks over the size. Yes, square footage matters. But millennials are more concerned about their commuting costs and how close their new home is to schools. In fact, most millennial buyers said they were least likely to compromise on school and neighborhood quality when deciding which home to buy. Many millennial buyers are looking for homes in safe neighborhoods near good school districts. Other considerations include walkability, length of commute and proximity of family and friends. So, highlight the benefits of your home’s fabulous location instead of wasting time trying to sell on its size.
• Know popular features. Here are some of the top home features millennials want: laundry room (86%), patio (81%), garage storage (80%) and a walk-in pantry (79%).10 If you’re thinking of making some upgrades to your home, choosing one of those might have millennials showering you with offers when you’re ready to sell.
This year has in itself recorded some historic feats, some of them may not relatively be desirable and even more world-turning events that have shaped the new landscape of human existence. From natural catastrophes, world health pandemic and now the rise of the millennial buyers, it’s only fitting for the real estate industry to also rise up, raise the bar and leverage the industry. We can no longer deny the fact that we are on the verge of yet another industrial breakthrough in the field of real estate investment.
And when we take a look back many years from now, we will always get to remember that the one time the millennial generation changed the game and incredibly made a mark was in circa 2020.
Data Source: National Association of REALTORS® and https://blog.cort.com/
Disclaimer: The blog articles are intended for educational and informational purposes only. Nothing in the content is intended as legal or financial advice.