Move over Baby Boomers, Gen Y has passed you as the largest share of the homebuying population according to the National Association of REALTORS®. Topping out at age 35, this group known as Millennials grew up online, are tech-savvy and don’t remember a time when they weren’t on a smart phone.
Most of these twenty and thirty somethings, nearly 70 percent, are purchasing their first homes and doing so because they want to own their own places. They understand the value of homeownership and more than 80 percent believe it’s a solid financial investment. That doesn’t mean they are looking to make a quick profit, though. Most expect to stay in their home for 10 years. So if you miss out on an opportunity to sell a home today, it might be awhile before you get another chance—unless, of course, a life change occurs that could prompt them to move.
What’s important to Millennials? Commuting. A good location is one that is convenient to their jobs—more so even than being near family, friends, entertainment, and schools. That being said, they tend to move within a 10-mile radius of where they currently live. About 60% are moving from rental properties while nearly 20% were living with family or friends. Married couples still dominate, but more than half have no children. And single women outnumber single men homebuyers in this age bracket.
As you’d imagine for first-time homebuyers, price is a crucial factor in their purchasing decisions. More often than not, they choose existing homes because of their affordability and location near transportation. Builders—you’re competing against older homes more than other builders. Look closely at how your prices stack up against resale. And if you can find property near public transportation or expressway access, you’re more likely to attract the Gen Y buyer.
Even though they are price sensitive, Gen Y buyers overwhelmingly prefer detached homes. About half buy in the ‘burbs and 20% in the city. This group is willing to compromise the home style and amenities for the right location and price. With 87% of Millennials buying resale, builders who can meet the demands of this large segment of the population have a huge opportunity. Price and overall value may be the main reasons they choose previously owned homes, but avoiding renovations or problems is the main reason they choose new.
How do they find their new homes? About half found their homes on the Internet. Photos, photos and more photos—young buyers want to see what a home looks like and get information about the property. Home shoppers of all ages are online, but Gen Y consumers are all about mobile and social. More than half used their mobile device—66% researched on a mobile or tablet website or app while 62% used a mobile or tablet search engine. Even more important, nearly a third actually found their new homes while searching on a smart phone or tablet. To capture these buyers, make sure your website is mobile friendly. And don’t underestimate the value of mobile advertising. Reach them when they are in your area through geotargeting and geofencing.
Beyond searching for homes and reviewing listings, Millennials look online for information on the homebuying process, as well. Make it easy to find educational materials and mortgage tools on your website, and keep messages quick and direct to retain their attention. Only 5% of Gen Y homebuyers purchase directly from a builder, so maintain a strong presence online on sites where consumers are shopping.
Want to learn about what Baby Boomers want? Tune in next month.
Stevens & Tate Marketing understands that different ages and generations consume information differently. We focus on finding the right mix of marketing tools to effectively reach homebuyers in all demographics—shifting not only the message to reach the target audience but also the delivery method. To learn more, visit our website at Stevens-Tate.com.
Note: Information garnered from the Home Buyer and Seller Generational Trends Report 2015 published by the National Association of Realtors in March 2015.