Referencing Millennials | Real Estate Market Analysis
It’s true. A fair amount surrounding the topic of millennials and home-buying has already been written. Nevertheless, a new report published on iMaxCRM.com points to the back-stepping of an entire generation regarding ownership access. So, I think it’s at least deserving of some closer attention. After all, most of the rumors circulating in-and-out of the real estate community about millennial home buying habits and investment tendencies are skewed, bias, and flat-out wrong.
As an illustration, over the course of precisely 8-weeks, iMaxCRM created a veritable focus group with data collected from our powerful CRM platform. Moreover, our research suggests that various trends among millennials across the US could potentially disrupt the seller’s market.
For one thing, millennials can be as old as 35 years-old by some standards. Therefore, there might be more millennials on your contact list than you think. So, why does this matter—you ask? Not only is managing your team, referrals, and listings crucial to successfully selling, but also using tools like iMaxCRM to recognize key demographics is vital to successful sales.
Furthermore, to understand how we, as real estate stakeholders, can adapt to changing demographics, we must recognize verifiable trends. Instead, many absent-minded agents and brokers choose to base their real estate marketing strategy on hear-say and ballyhoo.
Read on to see how iMaxCRM sets the record straight, once-and-for-all!
Millennials’ Real Estate Trends
There’s a ton of ‘fake news’ and misinformation out there in the real estate community about the upcoming generation of capable and motivated home-buyers. The following trends can serve as food for thought:
Disproportionate market segments
People with intentions of purchasing their first home are out in droves. At the same time, sellers are in short supply. In addition, the number of houses listed on the market is at it’s lowest since the turn of the millennium. So, although the market may seem “ripe-for-the-picking,” the number of millennials officially taking on their first mortgage is relatively few.
Rents through the roof
As put forth by Harvard University’s Joint Center for Housing Studies, rents are also at all-time highs.
To clarify further, Forbes quotes the former-largest generation, i.e., baby boomers, at around $148,000 spent on rent before becoming homeowners. Meanwhile, millennials’ tabs run significantly higher. The newer generation will pay around $200,000 in rent before making the moves to secure a mortgage.
Nevertheless, while continually dealing with a challenging housing market, the ardor of the young generation goes unabated. It turns out, the economic hardship endured by millennials is being compensated for by lenders through lowered interest rates and fewer stipulations when meeting loan criteria.
Beggars Can't Be Choosers
Interestingly, researchers from iMaxCRM found that when millennials finally do end up settling into their new homes, they commonly sacrifice location and convenience for affordability.
Of course, there’s not enough optimism in the world to stifle the colossal, $1.4 trillion student loan debt bogging down the dominant generation. Not to mention, when millennials leave college, they soon realize affording rent is not as feasible as previously thought—much less, owning a home is out of the question for most. Additionally, factor in low-income and a high unemployment rate, and it’s a wonder any millennials hung on long enough to become homeowners.
So, what’s this mean for those of us in the seller market?
Hint: Never lose sight of how much local markets vary across the US!
Millennial Homebuyers are Not All the Same
Millennial real estate trends come from a tech-savvy generation of our nation’s youth who grew up experiencing a ‘sharing economy.’ According to Annie Bergeron, a director of design for the globally recognized firm, Gensler, the social currency has a lot to do with shifts seen throughout the millennials market.
Also, where social status carried more monetary value in the past, it now largely depends on experiential value. In other words, ordering health food to the apartment, dining out at a new eatery, and traveling around the globe represent a large portion of the millennial demographic. So, it stands to reason their collective spending habits aren’t on-par with older generations, i.e., they’re far less frugal.
Notwithstanding their diversity, millennials grew up on the tail end of the Great Recession. Point blank, the national employment crisis combined with an incredibly limited housing supply left many millennials in a lurch when their professional lives were supposed just to be starting.
Consequently, the lag experienced by millennials attempting to join the homeowner’s “club” drastically affects the current sellers' market.
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