July 19, 2018
The Housing Market is Changing and Millennials Are Largely Responsible
Older millennials (those in their 30s) are leading a recent spike in homeownership rates. Since millennials in this age range have had more time to develop careers and generate a higher income, they can finally afford homes. Student loan debts could also be a reason why it has taken so long for them to purchase a home. On the other hand, younger millennials are still not yet ready to become homeowners. However, this may change in the coming years.
Recent reports show that millennials have taken a different approach to home buying than previous generations:
The Technological Takeover
As many people are quick to point out, millennials love their devices. So much so, that the National Association of Realtors reports that about 58% of millennials search for homes using a smartphone or tablet. Finding a home has become more convenient than ever, and this has caused real estate agents and brokers to adapt their strategy. Most of the communication with potential buyers now takes place through text. Rather than a traditional phone call or email, millennials text real estate agents to tell them they are interested in a property, to schedule tours, or to ask questions. To put this in perspective, 90% of real estate agents now communicate through text.
Millennials’ influence on the housing market has also spread to how the real estate agents list their properties. Millennials now expect to see videos or 360 photos of the property, giving them an even better idea of what to expect before viewing it in person.
The Move to the Suburbs
While millennials seemed to have opted for expensive urban areas like New York City in the past, more are starting to move to the suburbs. Zillow reports that about 47% of millennial homeowners would rather live in the suburbs than in a popular urban area. The spike in rental prices for urban areas is most likely to blame for this. The suburbs offer a cheaper option for those who cannot afford a high price tag. If this shift in location lasts, we could see the property prices in urban areas start to fall. This would be beneficial to people affected by the rising prices in urban areas.
It is interesting to see what changes each generation brings to the housing market. As long as real estate professionals can adapt appropriately, it should not be viewed as a negative occurrence, but rather a positive one.
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