What you should know about millennials in the real estate market
Much has been written about the Millennial Generation, or Generation Y, and not all of it has been flattering (to put it mildly). While it may be unfair, millennials are often characterized as entitled, even selfish, especially in a notorious Time Magazine piece. The accuracy of these statements can be debated at length, but one thing’s for sure: the influence of the millennial generation is real, and it is here to stay.
It is expected that by 2020, millennials will account for roughly 50% of the workforce. This means that organizations must adapt to a multigenerational workforce that has different needs and goals on the job. Employers have to adapt their training methods to on-board new employees and prepare a new generation of people who learn and think differently.
But what does that mean for the world of real estate? If millennials will account for 50% of the workforce in just a couple of years, they will also account for a significant portion of the buying power in the real estate market.
At Property Matters, we recognize that stereotypes can be limiting. That being said, it is also our job to learn by looking at trends and habits, and that is what we have tried to do here. With that in mind, here are some things to consider about the buying habits of the millennial generation that could impact the real estate market for years to come.
They do their research
Because millennials have grown up in the age of the internet, they are used to having information at their fingertips. With supercomputers in their pockets, millennials rarely make decisions without extensive browsing, planning, and reviewing. While they will want a real estate agent to help them through the process, they will show up with an opinion (or someone else’s) on everything.
They are detail oriented
This generation is hyper focused on having everything they want in a house. Perhaps this is owed to watching hours of HGTV, but millennials will want updated kitchens, bathrooms, and often list a home office on their wish list. In addition to stylistic demands, millennials are more likely to seek out properties with green home features like solar panels and energy efficient HVAC systems.
They are often saddled with debt
In 2003, the average student had to pay back $18,271 in student loans upon graduating. In 2016, that figure had ballooned to $37,172. The staggering increase in student loan debt is making it hard for millennials to save enough for a down payment on a new home.
They see their first house as a starting place
Because of aforementioned student loan debt, millennials are less likely to consider their first home as a permanent fixture in their lives. Many plan to sell their first home in just a few short years, which has led to a big drop in the average amount of time a family will spend in a home. The average family remains in their first home for more than ten years, whereas millennials average just over six.
Their parents might be involved
Real estate agents must be prepared for the fact that mom and dad may be coming to the open house along with prospective buyers. This could be due to the fact that millennials live at home for longer (see point above about student debt!) and are forced to involve their parents in order to afford their first mortgage.
They still love the suburbs
With the cost of city living, millennials have shown a preference for suburbs not too far from the city and not too remote. Nearly four out of five millennials live outside urban areas, close enough for a quick commute to limit travel expenses.
As usual, if you’d like to know more, feel free to get in touch with one of our local experts!