Market trends based on economic projections and real-estate gurus have predicted a major downturn in the 2019 real-estate market. Till recently, millennials have not been a major focus for the market. In 2019 however, trends suggest that the proverbial Gen Y could turn out to be the saviours of the American real-estate market.
Up until recently, millennials have largely been discounted as homeowners. The rise of the gig economy, 2008’s housing market crash, the recession and their unprecedented levels of student debt were among the main reasons cited for their disinterest in buying or investing in property. However, recent trends, backed by studies paint a different picture. Over 72% American millennials still prioritise homeownership over other major life goals. They see buying a home as a stable investment rather than a symbol of family life or settling down.
While a majority of homeowners are over the ages of 65, millennials, make up at least 36% of home-buyers. This shows that millennials are poised to be the driving force for the future of the American real estate market. As such, it is important to keep a track of what it is that they are looking for.
Millennials and real estate agents
Studies have shown that millennials are most likely to rely on their real estate agents when buying a property. They value agents who keep them personally informed and send updates as soon as a property is listed, the price changes, or it goes under contract; communicate via text message; and send emails that address the buyer’s specific needs. Most are looking for help to understand the buying process and rely on their agents to point out unnoticed flaws or shortcomings in potential properties.
One of their main priorities is to find an agent with an extensive knowledge of the neighborhoods that they are targeting, as well as an extensive network of connections with service providers in the area. The aim being to hire an agent who is a one stop shop for their needs as well as an agent who can get them the best price on all fronts.
What millennials want in a home
One of the key factors that millennials consider while choosing a home is the commute time. Finding a home that is a convenient distance from their place of work and other conveniences is at the top of their list of requirements.
Second on the list is affordability. While the state of the economy has not deterred most millennials from looking to buy property, it has definitely had an impact. Lower budgets, and higher rates of interest on loans have played a part in crippling their budget. This has also led to a higher rate of compromise. Most millennials are eager to leave home and start out on their own and so are more willing to compromise on most aspects of their new home.
The National Association of REALTORS newly released 2019 Home Buyers and Sellers Generational Report, has also found that millennials looking to buy homes, plan on owning them for 10 years or less as compared to Gen Xers, who would stay for 16 years or more.
Know your millennial buyer
Millennials looking to buy homes have a different set of requirements, priorities and needs. So it is important to understand your buyer. While there is a certain strata of millennials who can afford their homes, most millennials have financial help from parents or family. As such, their family will probably be a part of the decision making process. Most millennials are looking to make the transition from living with family to living on their own and so, prefer to find a property in close proximity to their parents.
Another factor to note is that there has been a marked increase in the number of single millennials buying homes. Since they look at homes as an investment, more millennials are choosing to buy homes much before they plan on getting married and starting a family.
In short, the largest strata of the American population has grown up and are now looking at more traditional means of investment and it is time the market takes notice and adapts accordingly.