Millennials have developed a reputation for being disinterested in purchasing luxury items. Instead of investing in high-end products, these consumers – ages 20-36 – prefer services that provide them with access to products without the burden of ownership. This behavior is exemplified by the growing popularity of apps like Uber or Lyft, which have largely mitigated millennials’ needs for buying cars in many cities.
However, with respect to the home buying process, millennials are moving away from this “shared economy” mentality and seeking out modern brokers to assist them with the purchase of their first homes.
Millennials make up the largest market share of any generational group. According to Goldman Sachs, these consumers are either currently in or are about to enter into their peak home buying years (ages 25-45). Both Zillow and Realtor.com predict that 2017 will be the year that these consumers will start to purchase homes at an increased rate, according to Reuter; Realtor.com even goes so far as to predict that this demographic will soon make up 33% of the market. Now is the time to captivate this audience, convince them of the value associated with homeownership, and in the end, close the deal.
In order to successfully engage with millennials, it is integral to understand what distinguishes these consumers from older generations of home buyers. According to Brookings, diversity defines the millennial population. Nearly 30% of this population is made up of minorities, and in more than ten states (including Texas, California and Illinois), minorities comprise more than half of the millennial population. In addition to being more racially diverse than prior generations of home buyers, millennials are also more diverse with respect to the makeup of “traditional families.” While 66% of millennials purchasing homes are married, a staggeringly high 13% of couples purchasing homes are single; this is the largest share among all generations of home buyers. A third characteristic that distinguishes millennials from other generations is that they have substantial student debt. According to NAR, 46% of buyers under the age of 36 have debts with a median loan balance of $25,000; this debt often hinders millennials from being able to save for a down payment.
Not only are these consumers different than older generations with respect to their demographic makeup and financial constraints, but they also hold different expectations for the homebuying process. It is key to a broker’s success among this demographic to understand how to satisfy the nuanced expectations of millennial consumers.
A modern agent will tailor the manner in which he/she engages with millennials throughout the purchasing process. These consumers have higher expectations than older generations of consumers with respect to the readily available nature of information, support and authenticity. Since millennials have grown up in a time when information is virtually at their fingertips, agents must utilize technology to respond to the questions and concerns of these clients in a quick and thorough manner. According to the National Association of Realtors, 90% of millennial homebuyers claim that the most important feature of a listing is that it is online and has a variety of images. There is also a greater need to convince these prospective clients of the value associated with owning a home, as 66% of millennials are first-time home buyers. The agents who will see the most success when selling to millennials are those who can articulate this value on channels that millennials rely so heavily on and deem as credible sources of information, like social media channels. See our blog post about social media marketing to optimize your digital marketing strategies.
In order to effectively convey the value of a home to these prospective buyers, it is important to highlight the features of properties that millennials consistently look for. Like all other generations of home buyers, millennials look for properties that will have relatively low heating and cooling costs. However, millennials also have specific expectations. This younger generation of consumers tend to prefer properties that will reduce their commuting costs. Additionally, they value properties that have open floor plans, ample storage space, high ceilings, and the most up-to-date technology. According to Homes.com, 56% of millennial consumers prioritize technological capabilities of a property over curb appeal. They are also more willing to pay more for a house that needs fixing up than other generations of consumers. Of all millennials, only 11% bought new homes as a means of avoiding renovations and problems associated with purchasing an older property. According to a survey conducted by the National Association of Realtors, demographic is also the highest of any generation to consider purchasing a home in foreclosure. It is essential to consider these statistics when narrowing down listings for millennial consumers.
Show millennials that you understand what sets them apart from other consumers. Show them that you are reliable, tech-savvy and knowledgeable. And, most importantly, show these consumers that you are essential in their process of finding the perfect first home.