While they’ve faced delays compared to generations that came before them, Millennials are finally entering the real estate industry, and their arrival has sparked some major changes in how things are done.
Millennials have become the fastest-growing segment of homebuyers. They now make up 37% of the market and a much larger share of first-time homebuyers.
Millennials come to the real estate market with different expectations and preferences than the generations before them. They’ve been slower to buy homes, and prices have not made it easier. They’ve changed the goalposts around when it’s “typical” to buy.
They’re also coming into the market with higher expectations of what they can do with technology. When it comes to the biggest purchase of their lives, Millennials want all the answers, and they want them online.
Surprisingly, the generation is also giving up on city living and fueling demand in suburban areas as they seek out bigger homes and yards as they start their own families.
Millennials Are Changing the Role of Real Estate Agents
Millennials as a rule prefer to seek out their own information online. With so much information about listing available online, Millennials are leaning on their real estate agents more for their negotiation skills and their ability to make the process feel less stressful.
Just as Millennial homebuyers take up more and more of the market, a new platform that changes the relationship between consumers and agents has landed on the scene. Nobul is a digital marketplace where real estate agents compete for deals, sending proposals to prospective clients that include transparent information about their fees and services. Consumers can also look up their past transactions and verified reviews. Real estate agents from any agency can compete against each other to represent consumers.
Nobul delivers a level of transparency not usually seen in this aspect of the housing market. CEO and founder of the platform, Regan McGee, shared that “Millennial first-time homebuyers are our target demographic.” He explained to Yahoo Finance that “we currently do the vast majority of our transactions as buy transactions with first-time buyers. We expect that first-time buyers and Millennials will tell their parents and their friends about it.”
Frustrations with the Housing Market
As a generation, Millennials have delayed homeownership far longer than generations ahead of them. There are a number of reasons it’s harder for them to enter the market, including higher debt burdens and higher rent payments making it tougher to put together a down payment.
Once they are ready to buy, they’re exceptionally budget-conscious. As they’re dealing with extremely high prices, agents will have to become increasingly competitive either based on their fees or on the services they provide.
Millennials Are Opting for the Suburbs
While many believed Millennials would stick to smaller homes in urban centers as they start families and face intense competition in downtown markets, they’re bucking the narrative and moving out to the suburbs. Approximately 47% of Millennial homeowners live in the suburbs rather than urban or rural areas, and as a generation, they show a preference for larger houses and private outdoor space.
Millennials are changing the real estate landscape. They expect better tech integration throughout the process, and their preferences are causing the industry to evolve.
