Millennials are blamed for everything wrong with America today. From the destruction of the chain restaurant industry to, apparently, buying too many avocados. They’re the bane of the Baby Boomers and the economy. A quick Google search would lead you to believe we’re destroying the Real Estate Market too. But if you take the time to look at the prevailing research, they’ve just become more fiscally conservative. There are straight forward reasons why; increased cost of higher education, low employment prospects after the Great Recession, and increasing debt. They’ve become more informed buyers, less likely to get their information from salesmen but from trusted sources online. By being more informed and smarter with their money, they’re shifting how they engage with professional services from buying cars to buying homes.
The Current State of Affairs
Millennial presence in the housing market is becoming more apparent with Millennials responsible for 43% of all primary mortgage originations last year (1). Since they’re entering the market later in their lives than previous generations, they are seemingly skipping starter homes (prices ranging from $150,000 - $200,000) in favor of larger, more expensive homes in the suburbs surrounding cities’ urban cores (2). So, we can see that Millennials aren’t shying away from homeownership, but rather, they have to wait longer than previous generations due to the rather unfavorable economic conditions that the housing bust of 2008 brought and the Great Recession that followed.
Current Cohort Analysis of Millennials in the housing market shows a recovery from the Great Recession from 2010 - 2016 across all Cohort groups with those 24 and older exceeding homeownership attainment of Cohort groups prior to 2010 (figure 1). Most charts you’ll see are based on Age Group Analysis, and reflect a stagnation of homeownership attainment with Millennials, but we can see that, that isn’t the case when we use the Cohort Analysis (3). Millennials have entered the housing market, and are quickly changing the landscape of how professional services like Realtors engage with them.
How Millennials are Changing the Way they Engage Professional Services
“Expect more disruption in the next five years as Millennial home buying accelerates.” -Stuart Eisenberg, National Director of Real Estate and Construction Practice for accounting firm BDO USA, LLC (4)
According to the National Association of Realtors (NAR), 99% of Millennials search online real estate websites for information related to the home buying process. With 44% of Millennials starting their home buying journey online and 56% of Millennials finding their home online versus with a real estate agent. What they found most useful on websites were professional photos at 89%, detailed information on the property at 85%, and virtual tours at 50%.
However, even with all the information available to Millennials online, the process and paperwork was still difficult to understand across 41% of Millennials. Meaning realtors are still invaluable in the Millennial journey when home buying.
To meet these changes, realtors are quickly catching up, but still have to maintain a strong understanding of advancements in social media and technology. Most brokerages have websites at 93% but only 11% of realtors are utilizing a professional blog. Realtors are starting to utilize Social Media with the highest participation on Facebook. Along with Social Media, realtors should be using their blog to create trust with Millennials searching for homes and for information. According to the NAR report, realtors are now engaging more with their clients through text message (90%) and email (94%) (5).
One last thing, before we move on. Consider Video in your engagement with Millennials. “Millennials do not want to read what your house looks like, they want to see it for themselves (6).” Sharing well crafted and professional videos generates 1200% more shares than text posts, and of those who used video reported 49% faster revenue growth vs those who didn’t (6).
Millennials are thinking long term 10 - 20 years ahead. As the older Millennials enter the Real Estate Market, the younger Millennials are doing as their seniors have done before them -- live with their parents for a bit longer than previously expected and renting content with the restricted privacy and increased saving for their future. While their entrance into the housing market is welcomed, Realtors need to change how they engage with their clients. Access to the internet has changed how initial engagements with potential clients are made. More and more, clients are finding information online, and finding realtors online.
Realtors with professional Photography and Videography are better engaging and reaching Millennials. When you’re ready to start creating well crafted content, give me a ring at 916-832-7845 or shoot me an email at hello@georgemoua.com and we can get started on developing your content creation strategy.
Sources:
1. Falcon, Julia. “Here's More Proof That Millennials Have Officially Entered the Housing Market.” HousingWire, HousingWire, 19 Sept. 2019, https://www.housingwire.com/articles/49899-heres-more-proof-that-millennials-have-officially-entered-the-housing-market/.
2. “Young Buyers Are Skipping the Starter Home.” Realtor Magazine, 17 May 2018, https://magazine.realtor/daily-news/2018/05/08/young-buyers-are-skipping-the-starter-home.
3. “Perspectives.” The Awakening of Millennial Homeownership Demand | Perspectives - November 29, 2017, 29 Nov. 2017, https://www.fanniemae.com/portal/research-insights/perspectives/millennial-homeownership-demand-myers-simmons-112917.html.
4. Lake, Rebecca. “How Millennials Are Changing the Housing Market.” Investopedia, Investopedia, 17 July 2019, https://www.investopedia.com/personal-finance/how-millennials-are-changing-housing-market/.
5. “Real Estate in a Digital Age 2017 Report.” 2017. PDF File. https://www.nar.realtor/sites/default/files/reports/2017/2017-real-estate-in-a-digital-age-03-10-2017.pdf
6. “5 Ways To Market Real Estate to Millennials Using Social Media Strategies.” Competitive Edge Social Media Marketing Management, 8 Dec. 2018, https://www.competitivebrand.com/real-estate-millenials-social-media/.