2018 Real Estate Trends: How Millennials are Shaping the Home Buying Process
According to Zillow - half of today’s homeowners are under the age of 36. Yes, that’s right, one-half of homeowners in this country are millennials. While the banter of who or what millennials are or aren’t constantly surface in today’s media, one thing is for sure in our market: millennials are shaping it.
At 32%, millennials are the largest single segment of the market. In addition, Inc. Magazine notes that 66% of millennials plan to buy a home in the next 5 years. While it looks like the market share will increase even further down the road, we certainly don’t need to wait to see the influence millennials already have on the market. Forbes listed “millennials” in the top 10 real estate trends to watch out for in 2018 and we are digging in and exploring what the means:
RESEARCH DRIVEN CULTURE
Millenials are notorious for researching anything and everything before buying. While other generations often make fun of this millennial obsession, when it comes to home-buying, millennials research expertise comes in handy.
91% of millennials start their home-buying journey online. However, this doesn’t mean that real estate agents are out of the picture. 70% then combine their online research with help from a traditional real estate agent. Millennials see agents as the expert of the home-buying process. Agents can expect to spend more time with the clients helping to understand the process and less time actually finding listings for their clients. Agents are really there to help facilitate the sale, while the millennials are busy picking out what they would like to see online.
Millennials know what they want, and stand strong with their list of must-haves. At the top of that list are energy efficient appliances and other “green” features, updated kitchens and bathrooms, open floor plans, home office and smart home technology.
What’s not on the list? Potential repairs or interest in any “fixer-uppers”. Millennials plan for down payments and the monthly costs of the mortgage payment and utilities, but leave little room for repairs or improvements. Half of the millennials prefer a brand new house for this very reason. If not brand new, turn-key homes are preferred.
As far as timelines go, the average homeowner keeps their home for ten years, while the average Millennial keeps their home for just six years. However, millennials are known to wait for that perfect buy to come up for a longer time span than the rest of the market.
EXPECT EXTRA DECISION MAKERS
One new-to-the-mix attribute of this generation is the addition of extra decision-makers in the home-buying process. Known as a generation of late-bloomers, millennials are known for bringing their parents into the mix.
While millennials lead the show in terms of research and finding the potential buys, when it comes to decision-making times, agents can expect to suddenly have an extra carload for that last showing. Why? Parents are often helping out with the down-payment (as either a family investment or a gift) and want to be there for the final stages of the process.
This new multi-generational (and carload) phenomenon gives agents a run for their money. When this happens they are catering towards two different sets of opinions, questions, and needs.
PHOTOS MEAN BUSINESS
While no surprise, quality photos are key to marketing towards millennials. Thanks to millennials making their own choices from online research about which listings they’d like to see in person, it’s crucial to have the best photos possible posted to make the cut.
Agents are now pulling out all the stops with beautiful social media accounts spotlighting professional photography (can’t forget the drone), and expert staging. This shift in millennials’ expectations in what they see in the listing is, in part, due to perfection seen from years of exposure to listings on HGTV.
LOCATION, LOCATION, NATURE
As previous generations, location remains at the top of the list for finding that perfect home. What is unexpectedly also similar to previous generations? Suburbs.
According to the The National Association of Realtors (NAR), 57% of millennials are buying in suburbs, followed by 16% in small towns and 15% in urban areas.
Millennials are known for wanting to get outside during their off hours while not sitting in front of their laptop, and want to be close to nature to do so. Living in an area where outdoor recreation is convenient and accessible is key.
The pragmatic side of this generation, however, wants to avoid long commutes to save money on gas and do their part to help the environment. With this in mind, it makes sense that millennials are preferring suburban areas outside major metropolitan areas with substantial public transportation options.
One thing that may not be a surprise? A listing within walking distance to a coffee shop or Whole Foods (or other specialty grocery stores) can increase the listing price as much as 17.5%.