There is a generational shift taking place in the real estate market and millennials, especially older ones, are starting to own residential real estate. They are currently the fastest-growing segment of homebuyers.
This recent influx of millennial homebuyers and the surge in the homeownership rates among this segment is quickly changing the real estate market.
Let’s discuss how millennials are changing the real estate market and what it means for the real estate industry and professionals, so you are better prepared for the future of real estate.
How Millennials are Changing the Real Estate Market
As millennials get older, they are terminating their leases and turning into home buyers. This is most common among those who are in their early to mid-30s, which is no surprise considering that this age group is now earning up to four times as much as other segments.
They make up almost half of all buyers who are in the online markets. Similarly, millennials under 40 make up half of all sellers in the online markets. This development has had a huge impact on the real estate market, especially when you consider that millennials’ influence is likely to grow even more over the next few years.
There are many reasons for the growth of this segment. Some believe it is because millennials are growing in their careers, earning more, paying off personal and student loans, and searching for real estate investment opportunities.
Their influx in the market has only been accelerated by the economic changes from the pandemic, all-time drop in interest rates, and recovery of employment. Most millennials have had incredible growth opportunities because of low interest rates and increased savings due to the pandemic.
It allowed them to stretch their budgets and acquire better homes than they expected.
Millennials Prefer Suburban Over Urban Living.
A large number of millennials are quickly moving away from cities and into the suburbs. They do not want old homes or starter homes and are opting to go for bigger, more expensive, new homes instead. This is one reason why they are shifting more towards the suburbs than rural or urban locations.
They can find better, updated homes at lower prices the further away they move from the cities. This mass migration could also have interesting effects on the pricing of urban and suburban housing in the coming years.
Millennials Are Late and Slow
The Great Recession of 2008 had a huge impact on millennial earnings, and their rising student debts only made things worse. This is why millennials have arrived much later in the home-buying market than previous generations.
They have been slow in buying their first residential properties than their parents or grandparents because many decided to return to their parents’ homes and live there longer due to the economic downturn.
It is estimated that around half of all adults under 34 have been forced to move back in with their parents due to the pandemic and other economic reasons.
This living situation has not been experienced by American adults in almost a century. It was last seen during the Great Depression of the 30s. Moreover, the delay in home buying may also be caused by millennials delaying starting their families.
Marriage rates have steadily dropped from generation to generation at a rate of around 10-15 percent. A smaller percentage of millennials are married compared to any previous generations at the same age. All of this indicates a delay in their arrival to the home buying market and a longer buying process.
Millennials are late, and they are also slow, which changes the way real estate professionals engage with them.
Millennial Dependency on Technology
The real estate industry has been heavily influenced by technology, and almost all millennials use the internet and their devices to search, select, and buy homes. This level of dependency on technology has never been experienced before because the entire segment uses the internet for their home buying needs.
Real estate professionals find almost all their millennial clients through online channels like social media platforms and real estate platforms. This should come as no surprise because millennials are the first generation to grow up with commercial computing and the internet in their homes.
Hence, it is more important than ever for real estate professionals to incorporate technology and the internet into their business.
Shift to Online Mortgages
The internet has changed many things about the real estate industry, and online mortgages are a great example. Previous generations had to go to banks and lenders physically to explore mortgage options, whereas now, it is an online on-demand service for millennials.
They get quick rates and comparisons online, which makes things much simpler. It gives them more options, and more than half of all millennial homebuyers are finding online mortgages to be far more convenient and cost-effective than traditional banks and lenders.
Therefore, banks and lenders must compete on the digital front to acquire business from millennials.
Variety of Online Options
Whether it is house hunting, agent hunting, mortgage comparisons, or information gathering, millennials are doing it all online. They are exposed to a wealth of options that they love. The internet gives them enough data to make informed buying decisions.
These factors add to the length of their buying process, and real estate professionals need to keep them engaged for longer in a highly competitive online market.
Changing Requirements
Before millennials, real estate professionals had value because they provided clients with all the options and important information about homes and sellers. This has all changed because millennials can obtain this information themselves from any number of online sources.
Now, real estate professionals are valued more for their digital competency, negotiation skills, relationship building, communication skills, and expediting real estate processes.
Millennials want different things from their real estate professionals, and this is changing the real estate industry. For example, property pictures are easily available online, and millennials require virtual tours instead.
Changes in Communication
While calling is still common for real estate professionals, most millennials prefer text messages. Real estate professionals must know how to use technology to schedule meetings, provide information, and effectively communicate with millennials.
Conclusion
Even though millennials have a longer home buying process than previous generations, they are still the fastest-growing segment in the real estate market. They are buying more homes than anyone else, and this makes them the most desired clients.
Their reliance on technology has changed how the real estate industry works in many ways. It has changed how people buy and sell homes along with how real estate professionals do their jobs. They want different things and this is drastically shifting the market.
There is an increase in demand for fresh suburban homes and streamlining of real estate processes. Millennials have a completely new and modern approach to real estate, and it’s diversifying markets and creating a generational shift rapidly.
What We Do
OktoHub is the first-ever on-demand real estate assistance program helping real estate professionals adapt to the modern changes brought about by millennials. The competition is getting tougher, and professionals are having to trade their personal and family time to meet demands.
OktoHub allows them to eliminate the need to compromise while boosting their network. With OktoHub, you can easily create a strong network of trusted real estate professionals around you. You can then hire these professionals for task-based real estate jobs in exchange for a one-time payment.
There is no need for a long-term hire, and you only pay for what you need. This means you can temporarily hire them for meetings, open houses, showings, inspections, or any other real estate task without having to make a permanent commitment.
OktoHub provides an invaluable service in a world where millennials have made real estate more competitive than ever. With OktoHub, you will never have to compromise on personal or family time ever again.
If you want to learn more about how millennials are changing the real estate market or about OktoHub, please visit our website today.
