How Millennials Are Changing Real Estate
Just three years ago, Millennial home ownership was at a record low. But as we all know, a lot can change in an even shorter amount of time.
At 72.1 million people, Millennials, or those born between 1981 and 1996, are the largest adult generation. They also make up the largest share of home buyers in the United States, according to the National Association of Realtors.
Millennials are Redefining the Term “First Time Home Buyer”
Because many waited to buy their first homes, Millennials are quickly redefining what first time home buyers look like. Anyone looking to attract both high end listings and qualified buyers for those listings should take note. As a recent Bloomberg article reported, “it’s not uncommon” to see Millennials purchase multi-million dollar homes.
Millennials may be the key to overcoming some of the record-setting inventory shortages the industry continues to face, especially because high end inventory has seen less drastic changes as overall inventory. Many Millennials put a premium on sustainability and a lot of luxury markets offer exactly what they’re looking for, such as walkability, nature, and a high quality of life. In addition, a lot of the markets that traditionally attracted tech-savvy Millennials looking for a vibrant food, art, and entertainment scene, such as San Francisco, San Jose, and Los Angeles, have retained some of their appeal. Because of the large size of these markets geographically, they haven’t experienced some of the same staggering declines in inventory as other markets.
Moving Up, Not Always Moving Far
Even though many left the city proper, in San Francisco, as one example, 80% of the huge swath of people who relocated away from the city still stayed within the 11-county Bay Area. In San Jose, total listings in March 2021 were essentially flat year over year, down by a mere 0.6%. In comparison, total listings across the U.S. dropped by 52% when compared to March 2020. Granted, lockdowns began one year ago in mid-March so the year over year data is a bit of an apples to oranges comparison; however, as overall inventory continues to remain at record-low levels, the luxury real estate market has fared better in both smaller destination markets and larger more diverse markets.
So, What Does This Have To Do With Millennials?
As everyone contends with how to get more listings, the luxury market has had a great start to the year. Sales of homes over $1 million grew 77% in January. Affluent Millennials who have waited to buy recognize that mortgage rates will rise and will be looking to buy. With 75% of buyers and sellers working with the first agent they contact, it’s time to make sure you’re reaching them first. As a bonus, data from the National Association of Realtors shows sellers between the ages of 30 and 39 hold on to their homes for an average of five years. Helping Millennials find the first home of their dreams may mean you’ll be listing it a few years from now too.
Find Luxury Buyers and Win More Listings
How real estate companies reach their desired audiences online has changed a lot over the past few years. One of the most important things you can do to win more listings is to have a clearly defined strategy to connect listings with the right buyers and be able to talk about your approach with potential sellers. Strategies may include:
- Hyper local paid search targeting
- Display audiences for real estate
- Navigating fair housing limits for audience targeting on Facebook and Google
- Website remarketing, email list remarketing, and dynamic remarketing
- and more!
Connect with our team of strategists today to discuss how you can effectively reach the people who matter most to you.