Millennials, Unlike Their Parents, Are Looking at Home Buying Differently
Millennials aren't following the typical "starter home" route their parents did, impacting the high-end housing market.
Millennial homebuyers are becoming a “dominant force” in the high-end housing market, according to a report by Bloomberg. Millennials buying their first home will pay 39 percent more than baby boomers did in the 1980s, according to a study by Student Loan Hero. That’s causing many millennials to wait longer to buy homes, so they can save up for a down payment and pay off debt.
However, wealthy millennials are bucking the trending of first purchasing a “starter home.” Instead, they’re going big.
“In the past, people bought a modest property, lived in it until starting a family, and then traded up to a larger property,” Bradley Nelson, chief marketing officer of Sotheby’s International Realty, told Bloomberg. “Millennials are finally coming out of the gate, and it’s not uncommon for the first purchase as a first time homebuyer to be a multimillion-dollar luxury home in the U.S. or internationally.”
Long-Term Market Changes
To keep up with demand from millennial home buyers, Bloomberg reports that developers are likely to integrate “high-tech features” into more homes and “focus on bolstering sustainability credentials” in new buildings. Developers figure to pass on those costs to consumers.
“According to a December Sotheby’s International Realty survey, 63 percent of affiliates polled said they expected luxury home prices to rise over the next three years in their respective markets,” according to Bloomberg. “More than 70 percent of respondents reported heightened demand at the end of 2020.”
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Since 2019, millennials have represented as “the largest cohort of home buyers,” according to a Washington Post report. A 2020 survey by the National Association of Realtors showed millennials made up the largest share of the home-buying market — 38 percent.
“Understanding the priorities and preferences of millennial buyers is important to developers and to home sellers who want to target buyers in that age range,” the report said.
Millennials Changing Communication
Home sellers aren’t they only ones changing their approach to reaching millennials — real estate agents are, too. Investopedia reported that while older home buyers prefer a more traditional approach of agents finding homes and setting up visit times, millennials are more likely to look up a home first online.
Texting is also the preferred form of communication by millennials, not calls or emails, according to Investopedia. Sticking with the tech-savvy trend, millennials are also more receptive to features like live streaming and video in lieu of traditional photographs.
“Videos give the audience a broader view of the property, communication, and location,” Jill Hussar, a broker-owner at Hussar Real Estate in Lakewood Ranch, Florida, told Investopedia.
Home Features Millennials Look For
Business Insider listed its top 13 things wealthy millennials look for when home buying. Proximity to attractions like bars, restaurants or natural fixtures like water or scenic views weighed heavily on millennial home buyers. Other driving forces are contemporary design, spaces for entertaining and Instagram-worthy spaces.
“Millennials who are entertainers or bachelors also prefer an open floor plan throughout the house for indoor and outdoor entertaining,” Business Insider reported.