Born between 1980 and 1995, the millennial generation is now prime homebuying age. With unemployment just over four percent and lenders touting low-cost loan programs for first-time buyers, more millennials are buying homes. So who are they and what do they want in a home?
As the most educated generation in history, millennials trust their own judgment. They know how to conduct research and make the best choices accordingly, and tend to be savvy consumers. Even the 66 percent who are first-time homebuyers tend to know more about the housing market than previous generations.
According to the National Association of REALTORS,® forty-nine percent of homebuyers 36 years and younger have children under the age of 18, 66 percent are married couples, 17 percent are single women, and 13 percent are unmarried couples.
As they grow with their families, they seek homes built with quality materials and sustainability in mind. Eight-foot ceilings are back in vogue for this group, as they seek to downsize their ecological footprint.
Social media, technology and demographic shifts are pushing trends faster than any other time in history, says the National Association of Home Builders (NAHB). Millennials want clean, contemporary lines and many are willing to sacrifice space for style. Lack of ornamentation is significant and intentional, says the NAHB, so sellers marketing to millennials should clear away clutter and excess furniture.
Millennial homebuyers choose older homes for the lower prices, but they want them to be as close to new in appearance as possible.
Home Pricing: Things to Consider
Some sellers believe it’s smart to price their homes high, but flipping the logic on them could help you see the fallacy of pricing a home for any reason other than what a qualified buyer in the current market will buy, based on current market comparable homes.
Buyers want to negotiate: Some sellers believe buyers will automatically offer less than asking price. In reality, they offer what they think the home is worth, what they believe the seller will accept, and what their lender will agree to lend on the home.
For sellers to win, buyers must lose: If the seller assumes the buyer is a “greater fool,” who’s going to be accompanied by a foolish real estate professional, and a foolish lender, then their high-priced home might sell. But isn’t it far more likely that the buyer is well informed and will choose wisely.
Sellers are entitled to make a profit: Home prices historically beat inflation by one or two points annually, but sellers must keep their homes updated and well-maintained for them to hold value. Home flippers must make significant improvements to make it worth more to a buyer that what it sold for two years ago.
The home is also a bank: Sellers may dream of selling their homes to pay off debts, buy a more expensive home, retire, pay for collage, etc. Buyers don’t mind giving sellers a profit, but if the market conditions don’t support the seller’s expectations, they’ll move on to other homes.