So, as you may notice, I have changed up the email template a bit! I am hoping this will make it easier to read on all devices going forward. Starting next week, I will send this email using a new server and there is a chance this may end up in your “Spam” or “Promotions” folder- please be on the lookout! Once I switch to this new server, you will also be able to Subscribe / Unsubscribe via the click of a button rather than sending me an email. Open to ALL feedback on this, seriously!
Furthermore, I am also building a site to archive older email blasts, and give our “let’s talk Real Estate” community a platform to market their business offerings & needs. STAY TUNED!
Now, let’s get down to business;
Last week one of our readers asked me about consumer / buyer preferences, behavior & trends – focusing on Gen Y (millennials) vs the future Gen Z-ers (the current teens of the world). Quick refresher; the Gen X generation was born 1960s-early 80s, Gen Y aka millennials came into the world in the 1980s-early 90s, & the Gen Z group, aka the future, were born after the late 90s.
I am so glad this topic was suggested because whether you are a buyer, seller, flipper, investor, wholesaler, landlord, agent, etc.- you should know how to GIVE THE PEOPLE WHAT THEY WANT.
SO, as we do, let’s talk real estate, let’s talk BUYERS…
WHO ARE THE LARGEST GROUP OF HOME BUYERS TODAY? MILLENNIALS
For the 4th consecutive year in a row millennials make up the largest population of buyers in the housing market (in 2017 ~34% of buyers were millennials). While many of the millennials who are purchasing homes today are in a committed relationship, there is also a large group who are starting to buy homes BEFORE they settle down, get married, and start a family. Now, just because they are taking the “home buying” step pre-parenthood, does not mean they are doing it at an earlier age than preceding generations. Millennials grew up during the war on terrorism, a financial recession, the collapse of the housing market, and were left without jobs upon college graduation. Many Gen Y kids were forced to move back home post-college delaying their “start” to adulthood. By the way these last two sentences makes it sound like life has been really depressing these past 25 years, I am obviously being dramatic to make a point – we had exciting times too!
WHAT DO MILLENNIALS LOOK FOR? INVESTMENT OPPORTUNITIES & SPACIOUS HOMES
So now, the market is hot, employment is up, and millennials are on the search for their own home. Millennials are a hard group to nail down in that, in my opinion, we have two major buyer segments;
- those who are looking for the best investment (primarily single family homes), rather than the forever home, and;
- those who have delayed buying a home at all, and now want to skip over the starter home and buy that McMansion: 4+ bedrooms & fun outdoor space to entertain
Now post-finding them a home, what do they want in the house? Open concept, entertainment spaces, eco-friendly features, and more personal customization. Manufacturers are now designing appliance lines catered to millennials specifically, allowing them to choose from a much wider array of colors and sizes. Oh, and to also note -we, aka millennials- we, generally (I am not speaking on behalf of all millennials out there), are bargain hunters. Millennials do not typically “value” that super expensive piece of furniture that could last our entire lives (yet). We are OK with inexpensive (but obviously stylish) furniture, because we tend to move around a lot, and will replace it in a few years when our preferences change.
HOW DO MILLENNIALS HOUSE HUNT? ONLINE
Don’t get me wrong real estate agents – we definitely still need you! However, the traditional role of an agent is changing. Often times, an agent is more so here to facilitate the sale process rather than find the homes. Beyond facilitating the sale process, millennials value any connections agents may have aka names of contractors, landscapers, what have you, to help them spruce up their new home.
WHERE ARE MILLENNIALS LOOKING TO BUY? SUBURBIA
Now that many suburban communities are urbanizing themselves, millennials are fleeing the cities for the “simpler” life. They want to live in an area that still allows them to walk to restaurants, bars & stores without being in a major city. They want the urban society feel with the suburban size & price tag. According to Realtor.com these were the top 10 areas where millennials bought homes between August 2016-February 2017: (1) Salt Lake City, (2) Miami, (3) Orlando, (4) Seattle, (5) Houston, (6) Los Angeles, (7) Buffalo, New York, (8) Albany, New York, (9) San Francisco, and (10) San Jose.
NOW, LET’S TALK GEN Z… WHAT DO WE KNOW ABOUT THEM?
The oldest Gen Z-ers are now ~22 years old, and most are not yet purchasing homes. Despite that lack of real time Gen Z market data, there has been much research done on what we can expect.
They still believe in the American Dream: a big part of the American Dream involves home ownership, and the majority of Gen Z-ers, when polled, expressed that they expected to own a home one day.
More Entrepreneurial: Gen Z is expected to skip the traditional higher education meets Corporate America route. This will allow them to work and live anywhere, accessing more markets.
Tech Savvy: They can research homes, financing, locations & in turn make offers faster than generations before them. This quick turnaround could make them more competitive in the market.
Less Loyal: They expect good, quick service. If they are not getting that from an agent, landlord, property manager, contractor, etc they will move on quickly.
As for what types of homes the Gen Z-ers will be looking for, it’s hard to tell yet, but they are said to be very similar to their millennial counterparts. So for now, while we can only assume single-family homes will continue to remain hot for the future home buyers of the U.S., I think it is safe to say we can expect a much faster home buying process to come.