Millennials, defined as young professionals between the ages of 18 - 35 years old, are expected to make up half the workforce by 2020 and are known as the most highly educated and diverse generation (44% accounting minority). They are known for their increased use and familiarity with technology and are also concerned with social issues. Millennials tend to be hard working and strive to find work-life balance. Millennials now make up the largest group of home buyers in the United States and are shaping the path for the future of real estate. To satisfy the demand of millennial buyers, Realtors should be aware of the ongoing trends led by this generation.
Where are millennials moving?
While the millennial population is still increasing in popular cities like Los Angeles and New York, there are many more unexpected places millennials are flocking to. According to a new study by the Brookings Institution’s Metropolitan Policy Program, many millennials are moving to Seattle, Austin, Orlando, Denver, San Antonio and Houston. These cities are attractive to millennials because they offer rich culture, entertainment, endless job opportunities and affordable living areas relatively close to the inner city. Besides these cities, there are also a lot of millennials moving to the midwest due to its very low unemployment rate and affordable living options.
“Surban” Neighborhood Trend
One of the biggest trends Realtors should be aware of is the emergence and popularity of “Surban” areas. Surban areas offer the best aspects of suburb and urban life. These neighborhoods offer walkability to outdoor green spaces, entertainment, fun nightlife and retail stores. They are similar to suburbs with their low crime rates and highly rated schools. Millennial hubs like Austin, Seattle and Denver have plentiful surban areas that drive millennials to their cities. Millennials are also moving to the suburbs due to its affordability but not at the same rate as previous generations. Housing options are popping up in abundance including single-family residences, condos/apartment complexes and townhomes. Realtors should familiarize themselves with their local surban areas and identify any potential surban areas. They can also help themselves by utilizing social media networks like Facebook and Instagram to promote their listings that fall in these popular neighborhoods. When it comes to surban homes, millennials are more interested in the lifestyle, experience and amenities that the neighborhood offers over a traditional suburban home, so these are features Realtors can leverage when promoting their surban listings to millennial buyers.
Millennials are less inclined to home ownership than any other previous generation due to student loans debt and the increase of rentals. According to the National Association of Realtors, half of millennial home buyers have student loans. This results in many millennials forgoing the opportunity to purchase a home early on in their careers, and choosing to rent while they pay off their student debt. The number of rentals is expected to continuously increase in surban areas, creating more access for millenials who prefer to put off purchasing a home. Due to these factors, it is estimated that home ownership among the millennial generation will continue to decline with the national homeownership rate anticipated at 60.8% by 2025. Overall, millennials are waiting to establish themselves financially before they make a home purchase. Although millennials are less inclined to buy homes than their predecessors, this does not mean Realtors should ignore this audience. Millennials still make up a majority of the world’s population, so even with low rates of homeownership, they are still one of the biggest buying groups - especially when it comes to first-time home buyers. Of first-time home buyers, millennials make up 66%, and they make up 34% of all home buyers.* However, Realtors should be aware that millennials are a new type of buyer. The real estate industry is utilizing an increasing amount of technology, and tech savvy millennials have embraced this trend. Through sites like Realtor.com and Zillow, millennials can view and tour homes without having to call a Realtor and visit a home. This is causing millennials to be much more informed on listings and their local real estate markets. To embrace this trend, Realtors should cater to millennials by using high quality visual marketing content when marketing their listings online. This includes professional photography, twilight photos, virtual tours, 3D walkthroughs, videos, drone photography etc.
Navigating the World of the Millennial Buyer
So how can Realtors optimize the buying process with a millennial buyer in mind? First, Realtors should identify potential surban neighborhoods in their local real estate market. Understand the features of the local surban neighborhoods and use keywords to market the listing specifically to a millennial buyer. The next step, is to get high quality marketing content to show off your listing - specifically, professional real estate photography. Because millenials are living in a digital world, they expect to see high quality photos when they search for homes, and if a home is not shot in it’s best light, it will not catch the attention of millennial buyers. Want to go above and beyond with your digital marketing content? Utilize photography extras like twilight photography, drone photography, and videography. These luxury products are the perfect way to seduce a millennial buyer. Finally, put everything together by marketing your listing online - the more exposure and professional photography will attract millennials to your listing. Millenials are dialed into social media platforms, Google, and other real estate sites like Zillow, Houzz etc., so these are the perfect places to target your millennial audience. Once they see your stunning professional photography and read about the convenient surban neighborhood, the millennials are bound to come running!