How Millennials Are Changing the Housing Market
May 12, 2018
Kristin E. Rosan
Partner, Madison & Rosan, LLP Attorneys at Law
The Greatest Generation grew up during the Great Depression and fought in World War II, the baby boomers came of age during the Vietnam War and rejected traditional values, and Generation X grew up with MTV and hip-hop music. Now we have Generation Y, or the “millennials.” Because of rapid innovation in technology, millennials have changed the world of marketing, communication, and real estate. Understanding millennials and their traits is essential to modernizing any real estate practice to meet this newest generation’s expectations and demands.
In 2013, the cover of Time referred to millennials — born in the 1980s through the mid-2000s — as the “Me Me Me Generation” and “lazy, entitled narcissists who still live with their parents.” Though these aren’t flattering views, millennials are also known as being tech-savvy when it comes to personal devices, social media, computers, and video games. They work and play hard, and are assertive and like instant gratification. This generation is also characterized as being slower to commit (e.g., marriage, jobs, and children) and more likely to live with their parents into young adulthood.
With unemployment and interest rates at record lows and consumer confidence high, the home buying potential for millennials is solid. However, it should not be surprising that millennials’ interest in home ownership is vastly different than generations past. They are not interested in a suburban home with a large lot and long commute to the office. If they do purchase a home, this generation prefers move-in-ready, higher-density housing with amenities and walkability to work, restaurants, and recreation.
The typical millennial will seek a home with a large open floor plan for entertaining, modern kitchen and baths, and the latest technology (thermostat, security system, etc.). They will also want a home office. Because many millennials enter the housing market relatively late (remember, they live at home longer and save their money), they pass up traditional starter homes for higher-end homes to their liking.
Millennials are credited with the rise of the 18-hour city, mixed-use developments where residents both live and work. Characteristic of an 18-hour city is a growing downtown residential population. These cities offer all of the amenities of a big city (sports, entertainment, and restaurants) without the hassles (traffic). Multifamily developments that include retail, office, and residential components are particularly attractive to millennials.
Millennials search for homes online, increasing the significance of online search tools such as Realtor.com, Zillow.com, and Trulia.com. Thus, online real estate marketing has become critical for (i) real estate professionals attracting clients, and (ii) marketing property for sale. The efficient use of digital marketing enables the industry to reach out and turn potential clients into clients. Further, a solid internet marketing strategy is a requirement for any listing, as a majority of buyers begin their search for a home online.
There’s no doubt that technology has forever changed the real estate profession. The newest generation’s attitudes and tastes have also had a measurable impact. Understanding millennials’ unique set of values and priorities will aid real estate professionals in serving these clients.