Think you understand the Millennial real estate market? The common perception is that they are quite different from past generations. They are “urban hipsters” that aren’t all that concerned about being homeowners. They’re burdened with student debt, so they either rent longer or continue living with their parents.
However, the notions surrounding Millennials may not be entirely valid. Consider some of the following fun facts that could change how you market to this rapidly expanding group.
Are they really that different?
- Believe it or not, the median age for first-time homeowners hasn’t really changed all that much over the last 40 years. According to a 2015 Zillow Research article by Cody Fuller, it has remained steady between 29 and 34 years of age since 1970. The NATIONAL ASSOCIATION OF REALTORS® Home Buyer and Seller Generational Trends Report 2017 places it at 31 in 2017.
- Zillow also states in a 2015 press release that the median time Millennials rent before buying is currently 6 years. In 1980, it was 5 years. Things haven’t really changed all that much.
- In the same release, they state that the median income for this age group is essentially unchanged since the 1970s. It holds steady at the low-to-mid $50k range (adjusted for inflation).
What makes Millennials tick?
Contrary to what you may think, Millennials are motivated by much the same as anybody else. Their views on home ownership often mirror those of their parents or grandparents. A 2016 Zillow Group Report on Consumer Housing Trends claims that Millennials “believe in the power of a home as a financial investment just as much as older generations do, put more weight in online reviews of agents and lenders, and remain incredibly loyal to the professionals and peers that helped them through the process.”
Surprisingly, most Millennials don’t fit the mythical stereotype. To the contrary, most are very community-minded.
- Only a quarter of those surveyed own in urban areas.
- Nearly half live in the suburbs.
- Fifty-five percent consider themselves as involved in neighborhood activities and other local surroundings.
While Millennials most frequently cite insufficient credit history and difficulty with affording the down payment as their biggest obstacles to getting a mortgage, the survey indicated that many young renters are likely on the brink of buying a home. Nearly half of them suggested that their next move would possibly be to own.
According to an Inman article by Ray Brousseau, President of Carrington Mortgage Services, agents “should be aware of the financing issues that may loom for Millennials eager to purchase their first home.”
Here are a few tips expressed in the same article to help Millennials through the process:
- Agent and clients should strive to partner with experienced, responsible lenders that offer a variety of mortgage products.
- Target lenders with lower minimum credit score requirements.
- Find lenders with extended eligibility to more property types and reduced costly overlays.
Millennials and technology
Technology plays a large part in how Millennials approach everything. According to the Zillow report mentioned above, “Millennials use more resources to educate themselves and research agents and lending professionals more than any other generation.” Take this to heart.
- Ninety percent use the Internet and eighty percent use mobile devices and apps to help with the home buying process.
- They use an average of at least three online resources (with 28 percent using five or more).
- Two-thirds of Millennials with mortgages used interest rate and affordability tools as well as mortgage calculators.
- In general, Millennials contact at least two agents when buying and at least three when selling.
- Sixty percent read agent reviews before deciding.
While they will use technology as a resource, Millennials still demand the personal touch. Relationships matter. Your marketing should strive not only to provide guidance and help, but also nurture those relationships over the long haul.
According to Zillow, once Millennials find a professional they trust, they are extremely loyal.
- Fifty-five percent recommended their agent to others.
- Twenty-six percent have left an online review of their agent.
- Forty percent stay in touch with their agent and turn to him or her for home improvement advice.
Using technology to communicate with Millennials makes good business sense. Make yourself an expert in the area. Use social media, email and texting to maintain a top-of-mind position with this important demographic.