I remember buying my first home with my wife. I will never forget the feeling of walking in together for the first time as homeowners. It was a defining moment in both our lives.
Today, younger Millennials are purchasing their first homes and older ones are already moving on to buying their second. Millennials are known as the generation that will buy a $200 pair of jeans after extensive research and trying on 67 different pairs to find the exact right ones. The way they shop for homes is no different.
This research-driven culture is supported by the internet where everything they could ever possibly want to know is right at their fingertips.
The most surprising thing about the way Millennials buy their homes is that they actually want a realtor to help guide them through the process, but that's not the only generational shift here.
Millennials Want Everything To Be Just Right
Millennials consider owning their own home as an important part of living the American Dream. Unfortunately, thanks to stagnating wages and a sharp increase in student loan debt, saving for that down payment isn't going to be easy. As a result, there isn't much cash left over after closing to make any updates Millennials want, so they instead seek out homes that are fully updated and move in ready to begin with.
At the top of Millennials' wish lists are updated kitchens and bathrooms, green features like solar panels, an open floor plan, a home office, a good location, and good Internet and cell service. Almost half of Millennials would rather buy a brand new house in order to avoid any maintenance issues that might occur early on. Only 11% of Millennials consider a home to be permanent anyway.
Eventually, Millennials plan to sell their starter home as 68% view it as a stepping stone to the home they really want and making improvements is not part of that plan. The average homeowner keeps their home for ten years, while the average Millennial only keeps their home for six years.
Some Things Remain the Same Regardless of Generation
When it comes to where Millennials want to live, the suburbs still reign supreme. Half of Millennials live in the suburbs and a surprisingly low 25% live in urban areas. Research shows Millennials want to live in a place that is close to work and close to things to do, and urban areas typically provide both of those things.
Four out of five adults between the ages of 18 and 25 live outside of the urban core of a city, which indicates an even stronger shift toward the suburbs. Still, they want to be close to work to save on commute times and travel expenses, and 65% choose the location of their home based on how far it is to work.
Why Should Sellers Cater To Millennial Home Buyers, Anyway?
Of all first-time home buyers, Millennials make up 66%, and they are 34% of home buyers overall. Over 66% plan to purchase a new home within the next 5 years. That's a huge generational shift in real estate. Millennials are better informed about their options than probably any other generation before them.
In short, if you aren't catering to this generation's enormous buying potential you're probably going to be missing out on a lot of opportunities. If you are considering selling your home:
- Make all necessary repairs and upgrades before listing
- Consider updating kitchens and baths - these have always sold homes, but now they are more important than ever
- Do an energy efficiency audit and make upgrades anywhere you can, including solar panels
- Consider upgrading any old appliances
- Install smart home features like programmable thermostats
Millennials do hours of online research just to buy a sweater, so they are naturally going to do even more research when it comes to buying a home. More than three-quarters of Millennial home buyers drove by a home because of photos and listings they found online, and over 60% did walkthroughs because of these listings.
Getting the information in front of them is key, and making sure you highlight relevant features is crucial.
Millennials Now Hold Massive Buying Power
Millennials hold a lot of buying power in today's real estate market, but many are using their parents to close the deal. According to top performing Denver realtor, Denise Fisher, this makes for an interesting family dynamic with clients that she doesn't see with other generations:
"One thing real estate agents must adapt to when working with Millennials is dealing with two sets of buyers for the same home. The millennial is usually the one that researches the home online but when it comes to the showing and buying, more and more parents are getting involved in the process. Millennials are frequently getting their down payment or the whole mortgage from their parents so when they are looking it's a family affair. While the Millennial is my main client, I will often be talking to the parents through the transaction and while showing houses I'll have 2 carloads of a family to walk through a house. They often have different tastes and ideas for the ideal home. This adds a new element to the sale for realtors."
Millennials are quickly changing the face of real estate. Gone are the days of only seeing what your Realtor wants to show you. Gone are the days of the glorified fixer upper and the weekend warrior. Millennials are busy working their side hustle anyway. New homes and already fixed up homes are the ones that are going to be moving on the real estate market, an ode to the buying power of the Millennial generation.
Learn more about what Millennials want in a new home from this infographic from Nationwide Mortgages. Much like baby boomers changed the real estate market to shape the suburbs, Millennials are just now starting to make their mark.