Real Estate's Newest Clients
The generation we are still getting to know. Those born between 1980 and 2000. The infamous “Millennials”. This generation doesn’t have the best of reputations. Despite being called the highest educated generation ever, they have also been named the laziest and most entitled, known for living in their “parents basements”.
However, research shows a different story especially when it comes to the real estate sector. According to the 2017 Real Estate in a Digital Age Study by the NAR (National Associations of Realtors), 66% of new home buyers are millennials. Not to mention millennials are the largest generation, the estimated number of U.S. millennials in 2015 was 83.1 million people. Also, according to a consumer housing trends report done by Zillow, showing that half of today’s homeowners are under the age of 36 and that half of the sellers are under 41! Zillow’s Chief Marketing Officer, Jeremy Wacksman says, “Millennials are shaping the market more than anyone realized!” The National Association of Realtors (NAR) found that the majority of those under age 36, 57%, are buying in suburbs, followed by those buying in small towns,16%, and those looking to urban areas,15%.
Technology Driven Customers
Accommodating to the Millennials’ shopping habits is an obvious. In 2016, the Pew Research Center found that millennials passed Baby Boomers to become the largest living generation in the United States. Generation Y is an ultra-connected generation, consumed by social networks and hyper-reactivity. Thus, 77% of millennia use their mobile to seek the good of their dreams. Technology has had a large contribution to the selling of homes in the past years and will only continue to rise. This is why many real estate agencies have digitized their services, investing in professional photography for their listings, using virtual tours, keeping their website/apps up to date, combining, for example, classic commercial offers and good restaurant addresses on their website. Others have taken the measure of the importance of social networks to implement targeted communication and have adopted marketing strategies via these large platforms.
The key takeaway for investors here is that millennials do not view homeownership as something permanent. In fact, the average number of years a millennial buyer kept his or her home before selling is 6, comparing to the average of 10. Keep in mind that this means, millennials are certainly return clients. However, it is important to remember the amount of dept this young generation has compared to the salaries they are receiving. According to the Zillow survey, the median income of millennial home buyers is $87,500; those who make less than $50,000 per year tend to rent instead.
Taking advanage of this large and imerging generation that we've often put aside because of their reputation, is important. In order to fully understand, we must consider the fact that majority look online first, 99% actually. However, 88% consider the use of a real estate agent as an essential factor in order to produce the proper end product. If the profession of real estate agent still has good days coming ahead, it seems that we still have to adapt the professional practices to the needs of this new demanding clientele and more aware of the real estate market.