Millennials, believe it or not, are dominating the residential real estate buyers market up until now!
Members of this generation have been finding stable jobs, with household incomes reaching $88,200. Most Millennials prefer middle- and upper-middle-class homes and account for 38% of the market.
Before the pandemic, house rents still beat home purchases by a large margin in 59% of the housing markets in the US. Residential real estate prices are not helping as they continue to displace wage increases in 80% of markets. High home prices were expected to drive demand for rental housing.
However, as low mortgages come into play because of the pandemic, more and more people are looking into having their own homes. But as prices become higher, previously-owned homes are still the dominant choice in the market. In fact, the National Association of Realtors found that 87% of home buyers chose previously-owned homes. The top reasons include better overall value (33%) and better price (31%).
Moreover, 38% of all buyers were previously renting a house or an apartment.
Among the types of homes purchased, 83% is accounted for by detached single-family homes. A good 50% of these homes were located in the suburbs, 22% in small towns, 13% in urban and rural areas, and 2% in resorts or recreation areas. This shows the preference for more affordable environments.
The trend will likely continue in the future, especially as green and simple living is also picking up steam. In fact, a considerable number of global city residents at 66% want to move to smaller low-cost cities yet offering a high quality of life.
Smart homes are also making an entrance. A favorite among Millennials courtesy of savvy real estate investors. Investors’ push to provide amenities may very well signal the need to identify amenities that could add value to their properties. They should likewise revisit their marketing strategies as amenities alone cannot attract tenants. All property offerings must be advertised while old tenants should know of any new amenities in the offering.
So what should sellers do to tap into this growing market?
One thing is for sure, the use of the Internet! Millennials are known to research online first before making purchase decisions. Sellers should also offer homes that are sustainable and have plenty of usable space. Also, consider offering properties located in bustling cities where the cost of living is more affordable. For buyers, the current market means improving communication with sellers, being straightforward with what they want in a home, and enlist the aid of a real estate professional.
On the other hand, leading sellers in 2020 were the Older Boomers (1946 to 1954) at 23%. Younger Boomers (1955 to 1964) and Gen Xers (1965 to 1979) came a close second making up 22% of the sellers.
Millennials have been securing stable jobs, contributing to their home purchasing capability.
Millennials prefer mid- to upper-middle-class homes.
Millennial homebuyers make up 38% of the market.
Marketers are advised to leverage the Internet as a way to reach the Millennial market.
About the writer: Shaura Cuyan writes all the hottest Real Estate trends and predictions for Summit VA Solutions! She has previously written for a number of freelancing gigs both locally and internationally and writes her own blog on lifestyle and current issues. She is a Graduate of Bachelor of Arts in Communication and has a Masters degree in Development Communication.