The COVID-19 pandemic has created challenges for many businesses and industries, including the real estate industry. With more people losing their jobs or refusing to meet in person out of fear of
Understanding and Navigating the Modern Age of the Millennial Real Estate Market
Dated: March 1 2020
What is a Millennial and Why Should I Care?
To understand the millennial market, it’s probably important to understand what a millennial is, right? In the most basic of terms, a millennial is a person born between the early 80s and early 2000s—a generation that came of age around the millennium. Millennials are one of the largest up and coming generations since the Baby Boomers, with 78.5 million American millennials aging in at 18-34 when 2015 rolled around. To the real estate market this means a whole new pool of clientele that are now at an age that they might be buying their first homes.
Naturally, with this new slew of millennial buyers hitting the marketplace every day, an agent must adopt modern techniques and approaches to marketing and selling to a new generation of buyers who aren’t as dependent on one on one interaction with an agent. Social media and the internet as a whole have impacted the ways in which we go about sales, and it’s only going to continue on a changing track from here on out. Evolving along with the changes is much easier than trying to catch up when you’ve already been left behind.
Statistics are key when it comes to buying and selling—and statistics show that millennials are the biggest upcoming generation of buyers and sellers in decades. According to the Home Buyer and Seller Generational Trend Reports of 2017 from the National Association of Realtors, of these millennials coming into the marketplace:
- 89% will use an agent in some capacity—but due to social media and access to knowledge buyers weren’t otherwise privy to in the past, they may be slightly harder to please.
- 63% of millennial home sellers say they would gladly use their agent again or refer someone else to their agent—this is the lowest percentage of any generation surveyed before.
- 45-50% will find their agent through a friend or family member.
- 35% of the current marketplace falls in the millennial generation, and nearly half of them are ready to buy their very first home.
- 99% of millennial buyers researched homes online before stepping foot in a single open house.
- 60% of millennial buyers found the home they ended up purchasing on some type of mobile device or app.
The average credit score of a millennial is 625, mainly due to student loan default and credit card debt, but that doesn’t mean they are completely written out of the real estate game. Millennials are more likely to qualify under flexible FHA-insured home mortgage loans and are more likely to buy with smaller down payments and larger principles, paid off over a shorter time period.
So, What Happens to the Market Once Millennials Come of Age?
This new era of buying and selling a home is a major shift in comparison to when buyers and sellers were completely dependent on the expertise of a seasoned agent, but that doesn’t mean the job of an agent or broker is antiquated by any means. Millennials now make up 32% of home buyers and the pool is only growing every day. As an agent, it is critical to create an online presence to keep up with the modern era of real estate—a tech savvy agent is going to make a much larger impact on the millennial market.
Though millennials tend to arm themselves with backed research, it doesn’t mean they forego using an actual realtor altogether in their homebuying process. They value a combination of the knowledge they’ve gained through general research alongside the professional and personal guidence a realtor brings to the table. That means they are actively looking to agents and realtors to help them navigate an otherwise confusing terrain. Agents can use this to their advantage, as they are more likely to come at a sale with a knowledgeable buyer—one who may need less help with the basics, but more with the intricacies that come with buying a home.
Understanding the Needs of the Millennial Market
Being thoughtful of the millennial market in terms of “wants and needs” is just as important as understanding the ways in which technology and social media change the market itself (which we will discuss in the next section). Millennials have different hopes, dreams, and aspirations than their parent’s generation. They are more interested in bigger cities and downtown areas than almost any generation before them, mainly because they tend to want to be closer to work.
An agent needs to keep in mind the economic situation these young adults grew up in. While the parents of this generation had buying power at an early age, many millennials have put off investing in major purchases until all the stars have aligned and the deck is stacked in their favor. They’ve personally experienced many years of questionable economic stability, which is why when they are finally ready to make a huge purchase, they want everything to be as perfect as it possibly can. There is a general lean toward avoiding renovations and seeking out homes with less customization and more historical uniqueness. Millennials are far more likely to buy in an urban area, with 21% of people under 34 purchasing in an urban market or city central. According to Business Insider, the median income for a dual-income millennial family in Arizona is around $40,000. Partner this with the fact that most of those people also have tens of thousands of dollars in student loan debt, it is very likely that your millennial buyer won’t want to invest money beyond the purchase price to fix up a house when they can buy one that is move-in ready.
A great strategy when dealing with millennial clients is to focus on AICDC:
- Attention: Grab the attention of potential clients and maintain it
- Interest: Garner interest of potential clients by asking a lot of meaningful questions
- Conviction: Gain the conviction of the client—offer strong favorable opinions/claims and evidence that support those opinions/claims (i.e.-testimonials from past clients)
- Desire: Show your clients housing data numbers and offer special services, like high-end walk-through videos or detailed open houses
- Close: Ask for the close! Be adamant about your client’s conviction so they can feel adamant in their decision
Selling in the Era of Social Media
As the largest upcoming pool of buyers in the real estate world, the millennial market is commanding a nearly complete overhaul of traditional real estate models as we have known them to this point. Agents are at a precipice of having to balance the act of maintaining old-school principles while adopting modern sales techniques.
Growing up in a peer-to-peer world, this generation is empowered by a do-it-yourself attitude, giving them a completely different outlook on the most basic concepts of buying and selling. These are the children of EBay and Etsy—they grew up in a world the encouraged researching before purchasing, and furthermore, getting the best possible price on their investment. Whether they are buying a home or childhood collectables, the millennial generation has mastered the art of using progressive technologies to fulfill their every want and need. Just as young people have been turned onto an entirely new approach to purchasing, they have also been made more aware of the troubles that can come along with being tied town financially to a 30-year mortgage—they are a generation far more likely to pay more over a shorter time period, or come at the sale with as much cash down as they can. They want a deal, and they need you to help them find it!
Effective marketing for an agent wanting to sell to young people involves sharable blogs and videos—sales techniques that provide a wide-ranging net and reach a broader audience. A blog or video posted online can garner a world-wide audience, while still only branching out to a specified and more focused pools of buyers. An agent could obtain a client from a world away simply based on the focus of their web content and presence. Paying attention to Search Engine Optimization, or SEO, can make a world of difference when it comes to website traffic. Ensuring the use of precise and detailed language will often warrant clients to come to you and the not the other way around.
On another note, optimizing social media presence and “online office” outreach apps allow agents to interact with clients and buyers in a way beyond what could have ever been imagined before. To the benefit of the agent, the freedom these technologies provide are priceless, as multitasking with multiple clients at the same time is now a reality. Enhancing mobile technology allows agents to yield messages, change schedules at the drop of a hate, store vital info about each showing, engage with potential clients interactively, and so much more. Agents who utilize scheduling apps, messaging apps, and mobile-friendly websites are able to step outside the normal constraints of the 9-5 lifestyle, and in turn can offer something that has been a struggle for decades—time. These modernized technologies allow agents to streamline their schedules and engage with clients at any time of day, and clients and agents who work on non-traditional schedules will rejoice!
It’s not just about easy scheduling and contact, it’s about making your site, your information, and your listings as sharable as possible. Sharing should be almost mindless—easy enough for a client or potential client to not question whether or not to put the time into sharing. Use simple and clear “share” buttons to make it easy—and utilize the info that can be gathered from who shares with who.
Just a few other ways to incorporate social media and technology for any agent:
- Create a Facebook group to garner leads
- Utilize the “live” feature on Facebook or Instagram to show a property
- Use 360-degree photos and videos
- Build a Chatbot on Messenger that can answer FAQs automatically
- Use excellent and quality photography
- Create multiple landing pages for potential clients to come upon in searches
- Utilize keyword searches
And in the End…
Staying relevant in the ever-changing world of real estate is the main goal of most agents out there today. Keeping up to date on technologies and changes in social media outreach can make or break a business in the modern age. Maintaining a prominent social media and online presence is key to maintaining a flourishing business. Garnering clientele takes more creativity than ever before, but the sheer number of clients that can be gained in a short amount of time make the extra effort worth it. The real estate market is forever changing and keeping up with the times and technologies will always be the best way to advocate for yourself and your business!
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