Percentage of Millennials Buying Homes
With millennials making up 66% of first time home buyers and 34% of buyers in general, savvy sellers are taking a hard look at the real estate interests of these young buyers and marketing their homes in effective ways to appeal to them. Millennials and home buying has become a popular subject of discussion, and we are here to dive in.
Millennial Home Buying Trends
How do millennials prepare for a purchase? Millennials are driven by research. They are analytical, and they take the time to weigh their options before confidently making a purchase. They watch review videos, read testimonials, and get an understanding of the market they are investigating in order to make an informed decision. Millennials generally want a Realtor so they will have someone to help give them guidance throughout the process, but will do much of the research themselves.
What Do Millennials Want in a Home?
What we’ve observed from millennials and home buying is their desire to be educated and discerning in their approach to buying real estate. The 2008 crash and years following had a big impact on many millennials, and critical lessons were learned – particularly the importance of being careful and well informed before making a big decision.
One common theme we’ve noticed is that being a homeowner doesn’t necessarily check the box in chasing the American dream. It’s more of a utility that gives millennials the opportunity to build wealth and have control and independence over their home. They want to contribute to their own nest egg rather than their landlord’s.
In regards to creative control, millennials want to hang whatever they want on the walls, grow a garden, remodel as necessary, and upgrade the electrical outlets with no implications. It’s difficult for many millennials in our market to acquire homes given the price point for an entry level property, and while we have an outstanding university on the Monterey Bay, younger millennials often feel the local career opportunities do not offer the compensation packages that it takes to save money for a down payment and become a homeowner.
Millennials are becoming more aware of the 3.5% FHA loan programs and lower down payment options in order to get into the market, and buying a condo is a great start. Older millennials with more savings and stronger incomes are making more expensive purchases, even second homes, and it’s not uncommon to find them house hunting in the $1M-2M range.
Millennials and Home Buying | Key Home Features
Many millennials want a garage, and they want a yard so they can have a dog. So while condos are a good way to get started, the ultimate goal for many is a single family residence. They want a convenient location close enough to work, and they want a safe neighborhood. Millennials with kids or planning to have kids soon want to be in a good school district, and want to live in an appreciating neighborhood. Millennials want to be close to fun things to do, and close to their friends.
They want to be sure they are making a good investment – they do not want to be upside down on their home in the future, and their decision making process is very calculated with future value in mind. They want to buy in neighborhoods with long term upside. They understand their first purchase will likely not be their forever home, and will be a way for them to get their foot in the door before upgrading down the road as they settle further into their careers and grow their family.
We hope this insight into millennials and home buying is helpful as you look at your possible target markets when selling a home! If you are a millennial home buyer looking for more information, check out our complete guide to buying on the Monterey Peninsula.