Millennial Real Estate Trends
Today, the largest homebuyer age group seems to be the millennials, and they are changing how communities in America look. However, what are the factors that are driving this age group into home purchase?
For starters, about half of the millennial population is dealing with student loan debt, but this is not deterring them from inroads into the real estate market. Instead, the generation considers purchasing a home as a sound financial investment. While debts might not be holding back millennials from owning homes, it’s prompting them to look into affordable neighborhoods.
Unfortunately, the housing supply is placing pressure on the millennials’ search for affordable housing. As some have children, they have to consider neighborhoods with the best schools, and they want areas that are walkable so they bring along their dog and strollers. In consideration of these and more factors, the millennial generation is rapidly changing the real estate market in several ways.Millennial real estate trends are absolutely changing the way the American community looks. And when we come back, we're going to see how the millennials are taken.
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Millennial Real Estate Trends, Very Conservative
Now does that surprise you? Well, maybe here's the reason why. You know, half of all millennials have student loan debt, and a generation ago it was much less expensive to go to college. So these guys graduate and they've got maybe decades worth of student loan payments that they're saddled. So they come out of that whole experience and they've become a very conservative generation. Millennials consider real estate to be a really smart investment.
Now they want certain things when they're buying a property and here's what they're looking for. If they're going to be working at a job in town, they'd prefer not to be driving long distances unless there's a savings component involved. They can find more affordable housing, that is newer and doesn't require a lot of their time and energy to fix it up. A lot of the millennial crowd prefers that to something that is more expensive in the inner city, and that's going to require a lot of work.
An exception to that might be a smaller place in the inner city, that has a low payment and doesn't require a lot of work. That allows them to be able to get to all their friends, and do fun things without having to drive a lot. Millennials consider the idea of being able to work remotely, an ideal circumstance. So this allows them to be able to live a little bit further out of town. Find that affordable housing and be able to work remotely without having to drive into the city every day.
Cities attract the Millennial Tech Workers
Cities like Omaha, Kansas City, places in Oklahoma and Texas are doing a really good job of attracting the millennial tech worker. For they can work remotely, be able to live in an inexpensive place and some cities have gotten really progressive about this. Like the city of Tulsa is offering $10,000 to people who are willing to move there and work remotely, rather than taking a local job by buying in Oklahoma and living in the city of Tulsa. They're able to add to the tax base, spend money out at restaurants and become a part of that community. Millennials with families, really liked the idea of being able to be at a place that's walkable towards the schools that they're going.
They want to be around good schools they want entertainment around. They want to be able to get into housing that isn't going to cost them more than 25% of their monthly income. Also, they love the idea of having a community connection and having enough money left over, to be able to travel and go places and do things with friends and with the home itself. One of the things that really matters to these guys is energy efficiency. So we're talking solar led lighting, energy-efficient HPAC units having a really good heard score, which is just an energy rating system. This stuff really matters and it's not just about the money.
They want to have a low carbon footprint. They do not want to be messing up the planet like the previous generations did. These guys know better. They're really smart, so they're looking for these kinds of things in their home. Also, technologies like smart technologies and anything that they can do to operate their home from their cell phone.
The Rise of Surban Neighborhoods
As the years advance, more and more millennials are opting to leave away from the bright lights. In fact, only a small proportion are buying properties in urban areas. However, they are not going for the strip malls they had while living in their childhood suburbs. Instead, the modern millennial prefers living in a suburban neighborhood, an exquisite mixture of both suburban and urban living.
Such neighborhoods offer millennial parents access to affordable areas with access to pedestrian-friendly shopping areas, open green spaces, and public schools. Surban housing options are not only priced better, but they are also in better condition compared to urban housing. Such choices leave the millennials more money to enjoy the finer things in life like first-run movies and restaurants.
Migrating to the Midwest
Midwest cities like Omaha, Nebraska feature low housing costs while offering great job opportunities. The Midwestern cities have an average unemployment rate of about two to three percent, which is below the national average of four percent.
The biggest selling point for these Midwest cities is their low price points. Take for example, purchasing a starter home on the coasts would cost between half a million to a million dollars. Such prices are way beyond the millennials’ budget, which drives them to find more attractive and affordable housing options in places like Minneapolis.
Furthermore, most Midwest cities are coincidentally homes to numerous universities and colleges. Such a college town means that there is always something to do. An event to attend, or even something artsy to go to. Plus, all these amenities and more are at an affordable level.
After doing a thorough research job online, the millennial homebuyers are entering the market better prepared. For real estate agents, this means that they don’t need to introduce the millennial to homes they can find online. But they should show them things they cannot find. This includes things like up and coming neighborhoods like those in Texas, more info here, that are likely to gain value in the near future.
The Rise of Longer Working Hours
Cities like Kansas City, Mo. are rapidly putting in place measures to ensure that they are perfect for millennials that are looking to move there. In part, this is due to billions of dollars invested for creating the necessary infrastructure, that’s attractive for both businesses and residents. Part of the strategies includes creating an 18-hour city that is active all day and part of the night.
Such cities enjoy below-average unemployment rates, which is a great deal for any millennial looking for a place to grow their careers and call home. Such jobs include call centers and data centers that are looking for affordable land, as well as where they can attract young energetic employees.
Increased Energy-Efficiency Awareness
Apart from demanding surban neighborhoods, the millennials are also keenly interested in communities that offer energy-efficient amenities both outside and inside their homes. Reduction in heating and cooling costs is particularly attractive in the current economy where home prices are high. Not only does this mindset make you feel better about saving the environment, it also helps you save money in the process.
It's easy to see why millennial home shoppers are preferring homes with solar, start energy rated appliances, LED lighting, high-efficiency cooling systems, Pex plumbing, smart technology, and hybrid hot water heaters.
Devolving Tech Hubs
In the past, landing a great tech job meant that you had to move your entire family to Silicon Valley. Fortunately, the tech industry is now nationwide, which means that techies with all types of lifestyle needs can virtually live anywhere and call it home. To prove this, Austin, TX is fast becoming south’s Silicon Valley as big tech names like Facebook and Amazon setup shop there.
Drive for Perfection
While millennials are not likely to spend their entire lives in the first home they purchase, there are a few features they find attractive. For starters, many home-buying millennials would rather purchase newly constructed homes so they deal with and avoid problems with renovations, plumbing, and electricity. This means that you are more likely to be attractive to the millennials if you have a new construct or rehab.
One of the reasons for this trend is because the millennial doesn’t have time or the money to carry out home renovations. In addition, this generation of homeowners is attracted to big kitchens, open floor plans, updated kitchen and bath, and home offices. Other important considerations for this generation include great cell reception and access to various Internet providers as well as an ideal location that’s close to their workplace.
Whether you like it or not, the millennials are having a profound effect on the real estate market all over America. In the meantime, expect the generation to maintain the current momentum and even build on it.
Millennial Real Estate Trends Conclusion
On the other hand, finding a sustainable and affordable family home in the fast-growing surban neighborhoods is not as easy as many would like. In addition, negotiating a great deal in the competitive real estate market is harder. With such trends driving different home purchasing patterns as well as the rise of new neighborhood types, one thing remains constant – millennials will require the services of a real estate agent to successfully navigate the ever-expanding real estate industry.
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