Do you know how much of the U.S. housing market millennials account for? It’s a whopping 32%! Millennials are the largest size generation to date, and consequently comprise 68% of all those buying homes for the first time.
In order to capitalize on this growing demographic of homebuyers, it’s important that real estate agents know the needs and demands of millennials in the real estate market.
That’s why today, Bigham & Associates focuses on providing you crucial information regarding the trends among millennials in the U.S. real estate market.
But before that, here are some important things to understand first.
Understanding A Few Things About Millennials
Who is a Millennial?
A millennial is anyone born anywhere between 1981 and 1996. Like other cultural generations, millennials are people of the same age group, who share similar attitudes, problems, and ideas.
And no, they are neither entitled or lazy nor live in their mom’s basements. As a matter of fact, over 30 percent own a home, according to data from the U.S. Census. They are also acquiring new mortgages much faster than any other generation.
What Are Some Interesting Facts About Millennials?
The following are some interesting facts about millennials from various publications and whitepapers.
– By 2020, in the U.S., millennials spending is expected to increase to $1.4 trillion, representing more than 30% of the total retail sales in the future.
– Millennials embrace brands on social media. 5 in every 6 millennials connect with companies on social media platforms.
– With over 63% of millennials having a bachelor’s degree, millennials are the most educated generation in American history.
– Millennials in emerging markets feel optimistic, while pessimism reigns in developed countries.
– Millennials are more culturally diverse than the generations that preceded them. As per the U.S. Census Bureau, 44.2% of millennials are part of an ethnic group or a minority race.
– At 83.1 million, millennials represent more than 25% of the American population.
– 30% of millennials bought homes costing $300,000 and higher in the previous year, up from 14% back in 2013.
– Millennials prefer texting for its convenience and quickness. Another study found that millennials prefer it texts because they are “less disruptive than a voice call.”
– Only a mere fifteen percent of millennials that bought a home in 2017 bought it within an urban location.
With that in mind, now let’s look at the top 5 millennial real estate trends.
Trend #1: Millennials are looking for energy-efficient homes.
Sustainability and saving money, in general, are a part of the millennial fabric. Remember, this is a generation that was scarred by recession during the formative years of their adulthood. They want to buy homes that are energy-efficient to keep utility bills low.
This drive is fueled by the desire for this demographic to seek out smaller family homes. Smaller is not only cheaper, but it is also easier to maintain and equip with energy-efficient features.
Trend #2: Millennials are using technology to find and buy homes.
Millennials have grown up in a world where digital technology and the internet are crucial parts of daily life. And they are making use of this technology to do various things, including finding and buying homes.
Today, there is a smorgasbord of top-rated real estate mobile apps that have allowed millennials to know the market even before they have initiated the buying process.
Besides technology, millennials have also embraced social media in their quest to find the right home. Facebook, Twitter, and Instagram are especially critical platforms for sellers to market their homes.
Trend #3: Millennials are attracted to open floor plans and layouts.
Millennials prefer an open floor plan and layout for various reasons. One, it makes movement between one room to another much more convenient. Two, it makes the space appear much larger than it actually is. And third, it is much easier to maintain.
The adoption of this layout is also evident in the changing work environment occurring throughout the country. Wherein, office settings have now changed into creative workspaces and floor plans.
According to proponents of this design, these changes are meant to foster increased productivity by employees.
Trend #4: Millennials are environmentally-conscious.
When buying a property, this demographic is looking to go green. They realize that the environment on our planet is being destroyed daily and so are more environmentally-conscious than the previous generations.
So, what benefits are millennials looking for when buying green homes. Well, they include:
– Reduce strain in local resources.
– Enjoy better health, as eco-friendly companies avoid using plastic by-products that have been found to release toxic materials.
– Enhance indoor environmental quality.
– Enjoy low maintenance and operational costs.
– Save utility bills through the use of energy-efficient systems and appliances.
Trend #5: Millennials are willing to buy fixer-uppers.
Millennials, unlike the previous generations, are willing to put in the hours to fix problem homes. And many of them will do the work themselves, which allows them to replace the cost premium with their sweat equity.
The push to buy fixer-uppers is due to a combination of factors including the high cost of real estate, stagnant wages, and student loans.
To keep costs in check, this demographic isn’t hesitant to upgrade a home they have bought, whether it’s placing carpet on the floors or painting the kitchen cabinets.
This is largely due to the tech-savviness of millennials in comparison to any other generation. Through popular shows like HGTV, millennials are now more aware of what remodeling entails.
Other Things Millennials are Looking for in A Home
– Smart homes
Millennials are also looking for homes that have entertainment systems, appliances, and remote-control lighting.
– Pet-friendly homes
Millennials own at least one pet. And many will walk away from homes that lack pet amenities, like a yard space, for example.
– Home office
Millennials are now the largest generation in the workforce. And many have online jobs that allow them to work from the comfort of their homes.
– Updated kitchen
Millennials want updated kitchens like the ones they are accustomed to seeing on the internet and on TV. Most want a kitchen with plenty of cabinets for storage, a large island, 6-burner gas stove, and double ovens.
More millennials are pursuing homeownership now than ever before. The national homeownership rate rose to 65.10% in the fourth quarter of 2019 up from 64.80% in the third quarter of 2019. That is largely attributed to the rise in new, first-time home buyers.
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