4 Ways Millennials are Redefining Real Estate
The millennial generation is already defining the future of real estate. They’ve surpassed Baby Boomers to represent the largest share of homebuyers of any generation at 32 percent, and 21 percent of millennials plan on buying a home in the next 12 to 18 months. Within the next five years, these buyers will begin to overtake previous generations of home sellers, and their habits will dominate the market.
1. New Technology
More than 50 percent of millennials search for homes using their phones, according to National Association of Realtors data. Mobile traffic to listing providers such as Redfin and ForSaleByOwner has overtaken desktop site traffic, which means having a listing that’s optimized for mobile technology will be even more essential to sellers.
2. Agent Alternatives
Millennials have grown up in a peer-to-peer world, which has empowered them to take on a do-it-yourself ethic. As a result, this generation is more likely to consider alternative methods to agents and are less convinced that the services agents provide are worth the cost. In a recent ForSaleByOwner study, 55 percent of millennials stated that they would consider selling their home by owner. Only 30 percent agreed that the service a real estate agent provides for a home seller is worth the fee.
3. Short-Term Rentals
Millennials have embraced the shared economy, with 60 percent of travelers in this age group putting their faith in services like Airbnb and Home Away, according to the Los Angeles Times. Some millennials are less likely to embrace a 30-year mortgage and large down payment, however.
Short-term rentals may be the key to coaxing these individuals into becoming homeowners. Millennials are traveling more for work than their older colleagues, averaging five business trips a year for a total of 15 to 20 days away. Between vacation and constant business travel it may seem more reasonable to rent, but sharing services could allow millennials to use their primary residence as an investment property and make money while they’re away.
4. Bright Lights, Big City
Millennials are more interested in the quality of their neighborhood than members of other generations. They’re also more concerned with avoiding renovations and less worried about customizations, according to a 2015 NAR study. And this generation is far more likely to purchase in an urban location, with 21 percent of home purchases made by those 34 and younger located in an urban area or central city.
Within the next decade, millennials will become the dominant force in the real estate market, and that could mean the upending of traditional real estate models as we know it. How do you think real estate will change as a result of this generation’s habits and desires?