Do You Really Know Your Millennial Homebuyers?
Do you know who millennial homebuyers are?
There has been a lot of buzz about millennials in the real estate market. They are expected to be one of the most significant forces driving real estate trends and sales going forward. There has been a lot of hype surrounding the ways to market to them as well. However, you can’t prepare properties and market real estate to millennials effectively unless you really know them and who they are. So who are they?
A new infographic published on Inman News provides great insight into who millennial home buyers are, and what they are really buying. The data was compiled from a variety of sources including the National Association of Realtors and Endeavor America Loan Services.
Here is what it reveals:
Millennials range from 18 years old to 32 years old. That means they are now all eligible home buyers and mortgage borrowers – at least according to their age. In 2014, 54 percent of millennial homebuyers were married.
Despite the fact that their average income has reached $76,900, they purchased very modest homes, averaging around $189,000. Contrary to all the hype about urban redevelopment and micro-lofts, 72 percent bought single-family homes with an average of over 1,700 square feet. Just 18 percent bought townhouses or condos. Seven percent bought manufactured homes. While many say convenience to jobs was a factor in their choice, three quarters of this home buying demographic prioritized quality of the neighborhood.
Even though just over 35 percent of millennial homebuyers are graduates with college degrees, the single biggest obstacle they quote as having is student debt. Over half said student debt was a problem. This has played a big part in how they financed their home purchases. Twenty percent got help from family, while 41percent used a co-borrower.
To find a home, millennials said they used real estate agents, mobile apps, and mobile search engines. Once they purchased, they said they planned to stay in their homes an average of 10 years.
So what does it all mean for real estate investors, agents and sellers?
Millennials could be the most substantial force in the real estate industry for the next 15 years, and beyond. However, the extent to which they are capitalized on, and who wins their business, will have a lot to do with who gets them the best.
Many real estate professionals may find that what they want isn’t stylish, urban micro-condos, but bread and butter single-family homes with a reasonable amount of space in a nice neighborhood. A lot of the gimmicks may be irrelevant. If it is in the right location and at the right price, it will sell. If it’s not, it is going to be a hard sell no matter what you throw in to sweeten up the deal.
Sellers and their agents cannot afford to underestimate how millennials are financing their purchases, and the financial obstacles they face. Incomes are good, and they are staying on the job when they can, but student debt is a debt-to-income killer. Those that can offer low and no down payment seller financing could win big.
When it comes to connecting with prospective millennial homebuyers, sellers and agents must connect in their preferred mediums. That might be Google+ instead of LinkedIn, or Instagram instead of Facebook. It means mobile friendly, on-demand service. Savvy real estate marketers shouldn’t overlook those that are being under-served by their competitors. That means those still using desktops, or even marketing to the parents that are going to pitch in to help finance millennials to get them out of the house.
Despite all the buzz about millennials, Generation X isn’t to be overlooked either. Right now, a huge percentage of this generation is just rebooting their financial lives. They are new, first-time homebuyers again.