One of the largest generations in American history is moving into its prime spending age – and they are one of the hottest and most debated groups in real estate. We’re talking about Millennials. Over 75 million of them are poised to reshape the economy, the workforce, the real estate model and how business is done for years and even decades to come. Coming of age during a time of technological pervasiveness, economic uncertainty and a changing job market, millennials have a much different set of behaviors and experiences than their parents.
Many assumed this distict group would be city bound, turning away from conventional suburbs for the excitement and diversity of urban life, giving them more flexibility to rent and move more frequently. While this remains true for some, the numbers don’t lie as 32 percent of all home buyers in 2015 were under age 34, reports the NAR (National Association of Realtors). Also reported by NAR, Millennials outpaced generation X, ages 35-49, who were closely behind with 27 percent. Combined, the boomer (ages 50-59) and older boomer (60-68) buyers made up 31 percent leaving only the silent generation (ages 69-89) to make up the remaining 10 percent of buyers.
It is clear that a shift is beginning to take shape as millennials marry and begin to start families, large factions are heading for the suburbs. Though it is true that homeownership among those aged 18-29 is lower than that of their parents in when they were in the same age range, it may be more of a delayed function as opposed to the assumed preference of renting. Many millennials have been slower to marry and move out on their own compared to previous generations. Coupled with the fact that they are coming out of college with high educational debt and can struggle to find higher paying jobs, these factors play a role in the millennial’s actual ability to finance a home at a young age.
The delay is one of the issues that the housing market as a whole has failed to understand. Knowing how to market to a game changing generation, when they aren’t quite poised with their money on the table is complicated at best. Older generations often want upgraded bigger and better homes when they are in the buyer’s seat, but this strategy doesn’t fit a millennial buyer, who often wants an upgraded home, but in a more practical, multi-use way.
The millennial buyer desires a unique property with differing amenities like open space living, outdoor/indoor multi use spaces and built in rentals (for services like AirB&B). Above all, they will often opt for quality over quantity. Many builders have failed to provide a product that is specific to a millennial generation, instead, opting for a large housing model with maximum profit and neglecting the up and coming buyer who will be pervasive in the market in the very near future.
HOW TO MARKET TO MILLENNIALS
A shift in the style of homes being built needs to change. Millennial attitudes toward ownership have helped spawn what’s being called a “sharing economy.” Desiring the diversity of urban life, millennials are searching for more than a home, they want a community, but within the charm of suburbia. The sharing economy will play a large role in the type of home and socio-economic system millennials desire, with life built around the sharing of physical and intellectual resources. Homes need to be a part of a shared community with local food, goods and trade driven by diverse people and organizations. Desiring walkability and convenience, millennials use public transit with ease and want to be within walking distance of shopping and dining.
Wellness is another key component as many millennials place a high value on what they put into their body and adding exercise a part of normal, everyday life. Their active lifestyle influences trends in many areas including fashion, food stores and sources as well as added amenities found in housing communities. The problem remains that typical suburban housing in America simply doesn’t provide the kind of environment many millennials are searching for.
Millennials are the first generation to fully grow up in the digital age, which has shaped the way they live, research and shop. Instant access to product information, price comparisons, online reviews is a must for targeting this generation, including polished websites that interface easily and give the ability for millennials to gain access to as much information as possible before making a commitment. The old face to face sales pitches don’t work well with millennials because they need great product photos and lots of quality information accessible ahead of time before they come and see for themselves.
All this said, no one really knows how all of this will pan out and how the millennials will shape and mold the world around them as they come of age. I am hopeful, as I work with my millennial buyers, that we can find homes to suit their needs, and I have observed the formula of better schools and more open space to be one of the main motivators. With a great many beautiful homes in the American suburbs and many boomers looking to downsize, the question of how millennials will fit in remains to be seen.
Maureen Hughes is the Lead Listing Specialist of The Wayne Megill Real Estate Team of Keller Williams Brandywine Valley in West Chester. For buyer or seller representation, or for more perspective on the local and national real estate market, please email email@example.com and visit The Wayne Megill Team site at http://www.waynemegillteam.com.