Millennials, also known as people born between 1980 and 1994, have long been coveted by a variety of industries for their long-tail buying power and ability to influence their peers via social media and word of mouth.
While millennials remain the largest segment of homebuyers – over 35 percent – the barrier to entry to the real estate market has been high for this generation.
Despite the research that shows millennials are more interested in purchasing a new home than their parents’ generation, they have also been a challenging market to target for large purchases, such as new cars and homes, due to their increasing financial challenges, including early-stage credit card debt and student loans. This often inhibits their ability to save for a down payment.
However, the housing industry is witnessing a seismic shift in millenials’ purchasing power, which is being driven by technology.
Previous generations of homeowners utilized antiquated methods of locating and purchasing a home, such as the Yellow Pages. The millennial generation, on the other hand, is both captive to and captivated by technology, which has found its way into the home buying process. The National Association of Realtors reports in Home Buyer and Seller Generational Trends in 2019 that 81 percent of older millennials found their homes through a mobile app.
One of the bigger trends is millenials’ desire to purchase slightly smaller homes that suit their lifestyle. Many have elected to live in communities that are walkable or near public transportation. These factors have led to a boom in home sales in and around urban centers and the ascension of “suburban downtowns.” Real estate agents are adapting by treating a sale more like a Bumble connection – bespoke and efficient.
The reliance on technology does not stop there. Technology is often used to facilitate a desired lifestyle. Real estate agents are leveraging lifestyle options such as AI technology, touchscreen televisions, and free “smart home” products to attract would-be millennial buyers. These products save the buyer time and reduce decision friction. It also leaves the buyer feeling valued and confident in their purchase.
The technology extends beyond home furnishings and amenities. Millennial buyers are environmentally conscious, seeking energy conservation and sustainability in their homes. Reducing your property’s carbon footprint is an attractive offering.
The demand is high. Realtor.com projects that despite steady demand for homes, the total existing home sales will decrease by 1.8 percent in 2020, as a “continuing supply shortage and moderating price growth will hamper buyers and tamp down sellers’ expectations.”
Simply put, there are more potential homebuyers turning the right age to buy than available homes, leading to increased competition, which means more real estate agents will be pushing perks and value to the buyers.
Millennials and other early-stage buyers can prepare themselves by completing a few things:
- Speak with a real estate agent about obtaining a pre-approved mortgage. A real estate agent can help you prepare.
- Discuss your purchasing limits with your real estate agent. He or she can identify several options that suit your budget.
- Be patient. It may take time to find the perfect home. Your real estate agent can guide you through the process and keep you informed of market changes and address any questions you may have.
- We hope these tips improve your home-buying experience. And if you’re seeking a new home, or would like to consult with a professional please visit www.sabor.com to locate a real estate agent. Helping homeowners is what we do!