Millennials are now the largest population demographic in the US. If you’re a real estate investor or just plan to someday sell your home, you need to understand their buying habits.
Unlike Boomers and Gen X-ers, 60% of Millennials don’t see home ownership as being vitally important. But that just means that they look at their home (and almost everything else) differently than you do.
Many of them will buy homes, just later in life. This massive population segment outnumbers any other generation before them and they are now starting to impact the real estate market.
But Goldman Sach’s research on Millennials lifestyle habits proves these “up and comers” to be vastly different from all prior generations. Which makes a ton of sense, considering that they have lived exclusively in a “digital world” which has uniquely shaped their priorities and behavior.
For example, many Millennials do not see driving to be terribly important. Unlike the rest of us who raced to the DMV the moment we turned 16, they’re putting off getting their licenses and buying fewer cars. They are far more concerned with physical fitness and well being than we ever were. The same Goldman Sach’s study found that 83% of them identified wellness as a top priority, making a healthy toned body more brag-worthy than driving a sexy sports car.
They are less trusting of the economy, more focused on saving money, do exhaustive research before making buying decisions and are putting off marriage and waiting to start families.
This is incredibly valuable information for property owners and investors – and it should change the way you invest or sell if you hope to attract this demographic.
What Millennials Want in a Home
40% of Millennials will buy a home in the near future. Single Millennials will want a more urban setting nearer to transportation facilities, beaches, trails, fitness centers and work centers. However, like generations before them, they will seek out the suburbs when they begin their families, according to CNBC. The difference is that they will be less willing to compromise, keeping shorter commutes and excellent schools at the top of their purchase criteria.
CNBC reports that they want homes with bright, open rooms and attractive outdoor spaces. Interestingly, the same report highlights that Millennials want their homes to creatively reflect who they are and their individual tastes. Gone are the days of young buyers accepting whatever is offered to them – particularly if it looks dated, or mundane.
They want every detail to be of their choosing. So don’t be surprised if they move in to a rental home and want to change light fixtures, remove doors and paint. In fact, expect it. The Irvine Company figured this out several years ago and will paint accent walls in their apartment communities the color of a tenant’s choice.
Making Smart “Millennial” Investments
These insights make it easier to see where to make real estate investments in Orange County. Look for the best buys you can find in or near Newport Beach and Irvine – our most “urban” centers. Outside these areas, consider property near commuter corridors. One can expect to get the best rental income from properties with open concept living spaces, edgy contemporary finishes and enticing private yards or garden atriums. This doesn’t have to cost an arm and a leg, but you should be mindful of these details when making investment decisions.
If you want to sell an older “used” home to a Millennial, your best bet is to give it a quick facelift, including fresh paint, new hardware and fixtures. Even an interesting new front door, painted in an unexpected color will help. And get ready to brag about your Walk Score. These new buyers care about this pedestrian friendly rating. I have two buyers right now who insist on knowing the Walk Scores for any property I present to them. (Which is why I have this feature on my website for each listing!)
Selling and renting homes to Millennials is a huge part of our current reality. They are changing the face of the real estate market and their impact will only get bigger. Understanding their mindset will be critical to making smart buying, selling and investment decisions now and in the future.
And, of course, I’m here to help you through that process.