December 5, 2017
Are Millennials Helping or Hurting the Housing Market? Or Both?
You’ve all seen the headlines by now: “Millennials are killing the ____ industry.” Golf, movie theatre, bar of soap – the list is quite extensive. If you look closely at the list of industries being killed by millennials, you will more than likely come across an article that millenials are also killing the housing market.
An even closer look at the statistics paints a less gloomy picture of these young professionals and the real estate market. According to the National Association of Realtors, millennials were the largest group of homebuyers for the fourth consecutive year. They are also having a huge impact in the luxury segment of real estate. 23% of luxury home sales this past year were to buyers’ age 35 or younger.
One of the biggest drivers of the growth in the luxury real estate market is the increase in mobile real estate-related activity. It is estimated that mobile searches account for over 60% of the growth in luxury real estate queries on Google and the force behind most mobile activity is the millennial generation.
Millennials have a wealth of knowledge at their fingertips. They want information quickly and efficiently. Any topic, no matter how obscure, can be found in a matter of seconds. And yet young professionals still show a preference to selecting their real estate agent through referrals rather than relying solely on an online search. This is an important dynamic as the demographics of the luxury real estate market continue to evolve. Millennials are going to be the driving force for the foreseeable future, so real estate agents not only have to be able to match the knowledge of their current and future clients, they have to focus on building a long-term relationship above and beyond the agent/client relationship. This generation wants their real estate agent to have extensive knowledge and to deliver it quickly and efficiently.
The suburbs of Minneapolis/St. Paul are only going to become increasingly more popular for millennial homebuyers. They are looking for affordable homes and homes on the coasts are half a million to a million which is driving millennials to the Midwest where they can get a home they really want for half the cost. The increased desire for this generation is suburban areas because they can get a more affordable home with better quality. Young professionals want to live in a suburb with an urban feel. Highly rated school districts, walking paths for strollers, and dog parks are some of the popular desires of millennial homebuyers. These future buyers are looking for a place to raise a family and create a long-term investment. Investing in learning about and understanding this generation is important for future growth in the real estate industry.