Millennials, or those born between the early-1980’s and mid-1990’s, are approaching the age at which they will buy their first home. In fact, according to a 2013 report published by the National Association of Realtors (NAR), millennials, also called Generation Y, made up 28 percent of all home buyers, or more than a quarter of the market. In order to capitalize on this growing demographic of home buyers, it is crucial that real estate agent understand the demands and needs of millennials in the real estate market. Here, we present the most important trends among millennials who are buying and selling homes. If you’re a real estate agent looking to attract Generation Y clients, you should know these facts and figures.
All statistics in this article are courtesy of the 2013 National Association of Realtors Home Buyer and Seller Generational Trends report. To learn more about NAR, visit NAR.realtor .
Trends Among Millennials Buying Homes
Their Family Is Still Growing
Millennials buying homes are more likely than the generation before them, Generation X, to be unmarried and have no children. In fact, 14 percent of millennials who purchased residences in 2011-2012 were unmarried couples, while only 8 percent of Gen Xers buying homes were unmarried. Additionally, 55 percent of millennials buying real estate had no children, while 70 percent of Gen X buyers had at least one child. This means that if millennials follow the behaviors of their predecessors, they will likely continue to grow their family in the near future through marriage and children. But are millennials looking for homes in which they can raise a family now? The short answer is no. For the long, answer, read on.
This Isn’t Their Dream Home
Seventy-nine percent of millennials in the housing market are first-time homebuyers, so it’s no surprise that their first home won’t be their last. Case in point: millennials who were selling their residence in 2011-2012 had been there an average of five years. Meanwhile, the median tenure in previous home for Gen X sellers was eight years. It makes sense, then, that millennials are more willing to make compromises on their home purchase than older buyers, according to NAR. Millennials are also more likely than previous generations to purchase older homes with smaller square footage. At the same time, they are more likely than their predecessors to see buying a home as a good financial investment. If you’re a real estate agent working with millennials, it will be part of the service you offer to help them understand this investment. Read further to learn about what other services millennials expect from their real estate agents.
They Need Their Hand Held
Most millennials purchasing homes right now are first-time buyers, so it makes sense that they would need a bit more help understanding the process. In 2011-2012, 65 percent of millennials buying homes had rented a place before, though a whopping 22 percent came directly from living with parents, relatives or friends. In making this big leap toward independence, many millennials relied on their real estate agent to make the process easier. In fact, when starting to look for a house, millennials were more likely than any other generation to research the home-buying process before taking another action, such as contacting a real estate agent or viewing residences online. Furthermore, 27 percent of millennials surveyed by NAR said that the hardest part of buying a home was understanding the process and steps, compared with 16 percent of Generation X who said the same. Therefore, when working with millennials, it is important that real estate agents not only act as salespersons, but also educators, helping to guide their clients through the home-buying process from start to finish.
Trends Among Millennials Selling Homes
They Want Bigger and Better
Millennials selling their residences are moving on to larger and more expensive homes. These are typically older millennials, as the median age among home sellers in this generation is 30, while the median age for home buyers is 28. Additionally, 91 percent of millennials selling are married couples and 71 percent have one or more children. That’s a significant difference in family composition from millennials who are buying homes, as examined earlier. Members of Generation Y who are selling their home are more often than not buying a larger house. In fact, 37 percent cited their home being too small as their reason for moving. To put that into perspective, among millennials surveyed by NAR in 2013, the median difference in size between the home they sold and the home they bought was 950 sq ft, while the median difference in price was $97,100. In order to increase their profits, real estate agent helping millennials sell homes should also be sure to offer their services in helping them find a new home. Keep in mind, however, that millennials may be more difficult to work with for some real estate agent.
They Have Different Needs
When it comes to selling their home, millennials may have different asks of real estate agents than older generations. For example, 23 percent of adults ages 32 and younger who sold their home in 2011-2012 requested a limited set of services from their real estate agent Among Gen Xers selling their home during this time period, just 6 percent requested the same. Millennials are also more likely than older generations to ask their real estate agent to help them price their home competitively or find ways to fix up their house in order to sell it for more. While they may seem more high-maintenance, millennials are also less likely to know that a real estate agent’s commission and fees can be negotiated. Therefore, real estate agents should be the ones to lead the conversation around commission and ensure they fully understand all the sellers’ requests and needs before agreeing to help.
Working with millennials in this day and age can be exciting for real estate agents. Currently, many are making their first big investment by purchasing their first home, and real estate agents get to be a part of that process. Understanding the mindset of millennials who are buying and selling homes will help real estate agents have a better experience working with them as well as further their career growth in the long run. After all, this generation is likely to buy and sell more real estate in the future, and you’ll want to be the first one they call.