It’s official: The millennial generation has overtaken baby boomers as the largest living generation in America. As a result, their influence is changing the housing market. Although this group of adults was once known for dominating the rental market, they are now making significant strides towards homeownership.
According to research from Business Insider, more than 66 percent of millennials are expecting to purchase a home in the next five years. That’s about 34 percent of all homebuyers in the nation. With this high demand, it’s no wonder that the real estate dynamic is expected to change in a dramatic way.
Mobile and Digital Marketing Takes Precedence
Digital marketing is already prominent for realtors, but once millennials become more invested in home buying, it will be essential.
Business Insider research revealed that 99 percent of millennials searched online while looking for a home, which is just 10 percent higher than those between the ages of 62 and 70 and 22 percent higher than for the silent generation. This underscores the need for online listings, social media marketing, and other forms of digital advertising.
Millennials also demand mobile access. More than 58 percent of millennials report finding a home on their mobile devices. The use of mobile apps, mobile-friendly websites, SMS messaging and texting, and social media can all be used to boost real estate leads and allow realtors to connect more personably with their clients.
Smart Home Automation
According to research from the NPD Group Connected Intelligence Home Automation Advisory Service, 25 percent of millennials are building their own smart homes, and one in ten say smart features are at the top of their priorities.
“This generation is one of the first to be utterly immersed in technology, and they want it everywhere,” according to the Houston property management and real estate firm Green Residential. “Aside from being digitally connected through Internet and cell service, ideal millennial rental properties will have smart home automation… A property doesn’t need all of these things to be appealing to millennials, but one or two of these amenities won’t hurt.”
Smart lighting, interconnected home security systems, keyless entry, voice-activated assistants, and more can all make a property more appealing to millennial buyers. In the next couple of decades, smart home automation will be one of the most coveted features.
Greater Trust in Real Estate Agents
Business Insider research also revealed that millennials want to use realtors more than previous generations. Only eight percent of millennials chose to forgo a realtor in their home purchase, while nearly twice as many younger and older Boomers chose to do the same.
It’s hard to say exactly why that’s the case. Some speculate it’s a lack of understanding of the market, while others say they simply have different attitudes towards realtors – there’s less of a negative stigma for the less experienced millennial purchaser.
Home Buying Is a Family Affair
A surprising fact about millennial home buyers is the involvement of the parents. Millennials currently hold massive buying power in every market, but they’re often unable to close major deals on their own. They need their parents to co-sign the mortgage or even put up a large sum for the down payment.
“One thing real estate agents must adapt to when working with Millennials is dealing with two sets of buyers for the same home,” Denver Realtor Denise Fisher said in an Inc.com interview. “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…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.”
Convenient Homes in Popular Locations
The type of home that most appeals to millennials also holds a lot of weight when it comes to millennial home sales. This younger group of buyers has tighter budgets, thanks to their college costs and lower salaries. They also want to be closer to downtown amenities, so the homes they purchase are usually smaller and more run down.
“Millennials want simplicity and convenience,” Will Cooper, president of business development at Berkshire Hathaway Utah Properties told the Park Record in Park City, Utah. “Turn-key homes that are close to work and their friends. Millennials are typically climbing the career ladder, have high student loan debt, and can’t afford to make updates on their homes.”
Realtors, investors, home sellers, and buyers must be aware of the changing face of real estate. Millennials are here to stay, and their massive buying power will influence this market significantly. Learning to adapt to their needs will be an important factor for all future real estate transactions.