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- These 80 million or more millennials will become the generation with the greatest spending power by 2017.
- Millennial shoppers spend more time (approximately 1,200 hours annually) and money (nearly $2,000 annually) online than other generations.
- This Instagram- and Houzz.com-inspired generation is motivated through visual storytelling.
Purchases by first-time homebuyers were at their lowest level in three decades in 2014. But many factors — including improved credit conditions, stronger employment and cheaper financing alternatives — make it likely that 2015 will see more and more millennial buyers surfacing in the real estate market.
These 80 million or more millennials will become the generation with the greatest spending power by 2017. Here are the top five things sellers and their agents need to know about millennials to successfully draw them in as they begin investing more heavily in real estate this year.
1. Constantly connected
Millennials are more connected to technology than any other generation, according to research from the White House Council of Economic Advisers. These tech-savvy buyers use their laptops, tablets and smartphones to stay connected in real time to the listings in their desired area.
Create an impressive online listing tailored to content millennials care about — that’s where they’re likely to be exposed to the property, so it needs to stand out from the crowd.
Consider assets such as proximity to commuter lines, walkability to neighborhood restaurants and shops, and proximity to high-quality schools and parks.
There are several application programming interfaces (APIs) you can integrate to expand relevant content to attract millennials.
2. Motivated by value
This value-conscious group is becoming savvier about self-directed real estate than their more senior counterparts. They’re thinking differently about how they want to work with agents as they take on more of the process themselves.
Millennial shoppers spend more time (approximately 1,200 hours annually) and money (nearly $2,000 annually) online than other generations, according to Forrester Research, and are comfortable banking, paying bills, shopping and booking travel from their devices.
This same behavior translates directly to real estate transactions as well. In 2014, total e-commerce sales exceeded $300 billion for the first time in the U.S. based on Census Bureau data.
Be prepared to deal with them directly. Millennials are more likely to take on responsibilities historically performed by the real estate agent, such as scheduling showings and negotiating the purchase price.
Most buyers and sellers still want the help of a professional, with 89 percent of buyers using an agent and 88 percent of sellers using an agent, according to the National Association of Realtors.
For buyer’s agents, don’t rule out self-directed home sales. Sellers still expect to pay the standard 2-3 percent commission buyer’s agents typically earn, for providing another source of inventory to consider for your buyers.
Inventory levels are still soft in the U.S. at approximately 2 million units of active properties, versus nearly 4 million during the peak, based on NAR data.
3. Getting visual
This Instagram- and Houzz.com-inspired generation is motivated through visual storytelling. They’re also big on transparency, and missing information or visuals can be interpreted as a sign that you’re hiding problems.
Millennials expect to see every square foot in the listing so share plenty of images that leave nothing to the imagination.
Use 3-D technology to provide virtual tours to give buyer’s a real-life experience when viewing the home on their tablet, desktop or mobile device.
Be sure your pictures are high-quality; the millennial audience is accustomed to stunning home and garden shots and will pass by listings showcasing inferior, low-resolution images.
Viewers retain 95 percent of a message when they watch it in a video compared with 10 percent when reading it in text, so savvy sellers will share video content to showcase the property.
4. Focusing on the lifestyle
Millennial buyers care as much about the amenities around their home as the ones within their home. Branch beyond square footage and number of bedrooms in your listing. Sell them on the location, and you’ll make a big stride forward in selling them the property.
Mirror urban rental listings by emphasizing facts and images of what’s nearby (coffee, shops, restaurants, parks, etc.). It’s content these first-time buyers are used to seeing front and center in rental searches.
Go to Walk Score to get the property’s Walk Score and Transit Score — those are powerful numbers to demonstrate how desirable the location is for buyers.
Play up public transit so they can see how easy it is to get to nearby central areas and metros with shops and restaurants.
5. Low-maintenance living
Millennials are generally passionate about building their careers and connecting with friends. Educate sellers on how to increase their home’s appeal by making it as low-maintenance as possible — both in being move-in ready and limited in requiring ongoing maintenance — even if it requires some upfront investment.
Make small tweaks to the yard, so it’s as self-sustaining as possible. Consider planting hearty and low-attention perennials instead of fussy annual-heavy flower beds.
Give the home a fresh, modern look to up its move-in-ready appeal by replacing dated lighting and hardware and installing relatively inexpensive new fixtures such as faucets and shower heads.
Millennial shopping preferences — taking on more of the work, expecting flexibility and demanding value — are being met by the self-directed model of real estate.
Replacing the absolutes of either working with an agent or not working with an agent with a spectrum of how homebuyers and sellers can work with agents presents excellent opportunity within the industry.
Millennials’ homebuying expectations and needs vary greatly from one to the next, and agents can win more business by working flexibly with this newest generation of homebuyers.