Millennials—the “kids” born between 1981 and 1996, according to Pew Research Center stats—have been called lazy, entitled and even delusional. But it might be more accurate to describe them as tech savvy, open to doing business solely online, and sure about what they want. Now that they’re the largest cohort of buyers, marketing to Millennials is a big (virtual) business.
In 2020, 38% of home buyers were Millennials and Gen Y-ers, according to realtor.com. Now, a year into the COVID-19 pandemic, many Millennial (and younger) buyers are flush with savings and stimulus money, and many of them haven’t had to make student loan payments during the forbearance period. They waited longer than previous generations to buy homes, but Millennials are ready to compete in today’s cutthroat housing market, and some of their buying methods are upending the way homes are sold.
They prefer texts
Basically all (99%) Millennials reported searching online to learn general information about the home buying market and home buying, and 58% of Millennials find a home on their smartphone or tablet according to the National Association of Realtors (NAR). Additionally, a recent realtor.com survey found that of the polled 830 adult respondents who were identified as likely first-time buyers, 29% said they started their home search process by looking online, with almost one-third saying they checked online for updates at least daily.
When marketing to Millennials, they prefer text messages when discussing homes with their agents, expressing interest in a home, scheduling appointments, and asking questions. They tend to make phone calls only for more urgent or complicated issues. Realtors are also adopting smartphone use, with 90% of agents communicating via text, 94% using email and 34% using instant messaging.
They shop and close online
One of the most unique features of Millennial buyers is their willingness to search for, negotiate and close on a property entirely online. Sometimes this has to do with social distancing, other times it’s a product of moving out of an area and buying a home in a new location without ever seeing it in person. Technology allows buyers to browse listings, apply for loans, negotiate offers, notarize documents and even close the transaction all online, and younger buyers are all in: monthly views on Redfin’s 3-D walk-throughs are up more than 500% since February 2020, and 63% of November and December 2020 Redfin shoppers made an offer on a home they’d never seen IRL (that’s “in real life,” Millennial-style).
With the pandemic allowing many to work from home, record numbers of home buyers searched out of their areas to buy. In some areas, Such as Boise, Idaho, 80% of online home searches came from out of the immediate metro area. And sites like Instagram’s Cheap Old Houses, which curates and publishes listings from across the country that are less than $100,000, have seen a huge spike in followers since the beginning of the pandemic.
Other times it has to do with the need to move quickly in a hot market. The realtor.com survey found that 43% of respondents have been searching for a home for more than a year, 33% have been in the market between six and 12 months, 14% have been looking for between three and six months and 10% entered the market within the last three months. With a majority of respondents having been in the market since last spring, they are fully aware of the competition they are facing; 53% said they expect a lot or some competition and 20% said they expect a lot of competition.
They know what they want
Many Millennials have waited until their late 30s to enter the housing market. Because of this, they’re focused on location and many have the money to afford choice amenities.
According to Pew Research Center information, college-educated Millennials in 2018 had a median annual income of $56,000, which was roughly equal to college-educated Generation X workers in 2001. The same research found that Millennials had a median household income of $71,400 in 2018, whereas Gen X came in at $70,700 in 2001.
With that money, first-time buyers are looking for larger spaces in quieter areas, according to a recent realtor.com survey of 830 likely first-time buyers. Overall location ranked as the top feature potential homebuyers are looking for (38%), followed by a quiet location (33%), a large backyard (32%) and a garage (29%).
Gen Z ranked location as their first choice (37%), followed by garage (35%) and updated kitchen (26%). Quiet location and large backyard tied for fourth with Gen Z buyers (25%). For Millennials, location is the most important feature (40%), followed by a large backyard (37%) and a quiet location (32%). Potential buyers aged 40 and over are looking for a quiet location (43%), location (35%) and a good community/neighbors (33%).
Gen Z ranked location as their most important amenity (37%), followed by a garage (35%) and updated kitchen (26%). Quiet location and large backyard tied for fourth with Gen Z (25%). For millennials, location wins (40%), followed by a large backyard (37%) and a quiet location (32%). Potential buyers aged 40 and over are looking for a quiet location (43%), location (35%) and a good community/neighbors (33%).
Other amenities to highlight when marketing to Millennials include energy efficiency, low-maintenance features, built-in technology, home office space and close proximity to public transportation.