Real Estate's Newest Clients
We're still getting to know the generation of people born between 1980 and 2000: the infamous “Millennials”. This generation doesn’t have the best of reputations. Although they've been called the highest educated generation ever, the've 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 real estate. 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 36, 57%, are buying in suburbs, followed by those buying in small towns,16%, and those looking to urban areas,15%.
Technology Driven Customers
It's pretty obvious how you can accomodate to Millennials’ shopping habits. In 2016, the Pew Research Center found that millennials passed Baby Boomers to become the largest living generation in the United States. This is an ultra-connected generation, consumed by social networks - a good 77% of millennials use their mobile to look for products and goods. Technology has had a large contribution to the selling of homes in the past few years and will only continue to grow. 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 general a millenial buyer will keep their home for around 6 years, comparing to the average of 10. Keep in mind that this means millennials are return clients. However, it is important to remember the amount of debt 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.
Making the most of this growing generation is important. In order to fully understand their buyer habits, we have to consider the fact that the overwhelming majority look online first, 99% actually. However, 88% consider the use of a real estate agent as an essential factor to get the right results. To really keep real estate going, it seems that we still have to adapt our professional practices to the needs of this new demanding clientele, and become more aware of the new real estate market.