There has been a lot of speculation and “data” around whether or not millennials will be the next group to flood the homebuyer’s market. But despite the numbers and research these experts pull their predictions from, most of them are not millennials themselves and don’t truly understand the struggles of millennials today.
That’s where I come in.
I’m not going to pretend that I can predict the future of the industry. But I have the great fortune to be part of the great, mysterious generation of millennials that no one can seem to figure out. We are different and people don’t understand us. I assure you, we are not as complicated as everyone makes it sound.
First things first: as this generation spans from those born from 1980-2000, it wouldn’t make sense to have a “one size fits all” strategy for everyone. I mean, you wouldn’t cater to the 34-year-old the same as you would a 15-year-old. So instead of grouping all millennials into one giant group and saying “target all millennials this way,” let’s talk about which specific group of millennials you should go after first.
Millennials with Higher Income in Professional Fields
So which members in this group are buying houses? Modern American Realtor answers this with “think less Lindsay Lohan, more Mark Zuckerberg.” Those holding stable jobs, with higher-than-average incomes, who have been financially responsible and saving money, comprise a sub-group that is more likely to buy. Think college-educated yuppies with well-paying jobs in tech, law, finance, academia or consulting. Though not exclusive, this group is financially better poised to own a home and more likely to be at a place in their lives where they desire it.
Not only does the potential millennial homebuyer need a stable job and income, they need to be living in a location they want to settle in. The term “yuppie” is short for “young upwardly-mobile professional,” and often times, “upwardly-mobile” means relocating for a job opportunity to a city they don’t plan to live in forever. It may be for a fantastic opportunity to boost their career, but in the long-term, they may not want to raise kids there, or they want to return home to live near friends and family.
Take for example, the housing market in Seattle. Although the mega corporation Amazon is hiring thousands of millennials each year, since many of the new recruits come from outside the region, they’re not as keen on buying a home.
Millennials Facing a Turning Point in Their Personal Life
The other millennial group to go after are those who are at a serious and pivotal time in their personal lives. Those who are getting married, about to have a kid, or have decided to live with their significant other. These people are about to start a new chapter with their partners, and are poised to potentially make a change in their living situations. However, if these potential first time homebuyers are not aware of the options open to them, they may not even look into buying a home and continue to rent.
Also, the focus should not solely be on the first time millennial homebuyer. As Steve Harney of Keeping Current Matters proposes, “think about the 26-year-olds who took advantage of the homebuyer tax credit back in 2010 or so, and settled on whatever house they could get. Now they’re 30 years old and looking to move to a bigger house because they just had a kid.”
Earn Their Business By Earning Their Trust
As Steve Harney preaches, it is the responsibility of the agent to educate the public of the changes in the market and to dispel any misconceptions they have about mortgage rates and what it takes to afford a home.
Educate them about the mortgage process. 40-50% of Americans believe that the minimum requirement for a down payment is between 15-20%. Show them that many programs are available at 3-5%, but might not last for much longer. Teach them that by continuing to pay steadily increasing rent rates, they are digging themselves further into the rent trap. Every time the rent goes up, it’s going to take a little longer to save enough to become a homeowner.
Over 70% of millennials say that when they find a brand or professional they trust, they stop evaluating other options. They are reportedly easier to please and have a higher satisfaction rate, which leads to being more likely than their counterparts to refer business. You can’t have the mentality that even if your competitor helps them buy or sell their first house, you’ll get their business the next time around. Whoever gains their trust first is likely to gain a “lifetime customer.” Think about millennials who are diehard Apple or Starbucks fans. It would take a lot to convince us to buy a different line of technology, or drink a different brand of coffee.
With that in mind, now is the time to get ahead of the curve. Because falling behind now means losing out on potential millennial clients in the long game.