Saturday, April 27, 2019 / by Michael Picciuto
Move aside, baby boomers and Gen Xers! Guess who’s taking the over the homeowner leaderboard? Yep, you better believe it. Millennials are busting out all over. They’re getting older and finding stable careers. Their household income has increased to $88,200, and they’re looking to buy their first homes in middle and upper-middle class neighborhoods.(4)
This works out perfectly for them as more baby boomers are retiring and downsizing. Next year, millennials will lead the way in number of mortgages, accounting for 45% of the market. They’ll be followed by Gen Xers at 37% and baby boomers at 17%.(5)
In 2019, millennials will lead the way in number of mortgages, accounting for 45% of the market. They’ll be followed by Gen Xers at 37% and baby boomers at 17%.
What More Millennial Home Buyers Means for Sellers
Here are three important words: Know your buyer. Millennials are internet savvy and do their research before house shopping. They look for:
Easy online shopping. The home search starts online for millennials, so you need to make the best possible impression on the internet. Make sure you invest in high quality photos, and, for extra measure, consider using a drone to take aerial video footage.
Quality over size. Yes, square footage matters. But millennials are more concerned about how sustainable and usable each space is. Get rid of your junk so they can visualize a bright future in your home without your stuff there.
Location. A lot of millennials are looking for homes in 18-hour cities like Nashville, Tennessee, or Austin, Texas, that offer big city life at a more affordable cost of living. If your home is in a walkable area with access to public transit, expect millennials to come knocking at your door.
Low-maintenance lifestyle. Millennials are used to living in the age of high-tech advances and Amazon Prime. They’re looking for energy-efficient homes with smart appliances. If you don’t have them, they’ll look elsewhere or lower their offer so they can upgrade after they buy.
What More Millennial Home Buyers Means for Buyers
Okay, if you’re looking for a three-bedroom, single-family home in the suburbs, expect to have a lot of competition. You may have to reprioritize what you want in a dream home. Follow these tips:
Know what you want. Decide what you absolutely need in a home. If you’re married and house hunting, you and your spouse need to agree on must-haves. Compare your individual lists and combine them for your real estate agent to use as the foundation of your home search.
Write a letter. Sending a personal story to your seller might be just the thing that makes you stand out from similar offers. Nashville couple Abby and John included a personal letter when they made an offer on their home. “We sent the sellers a personal letter with our offer,” Abby said. “The best thing you can do is to include in the letter things you love about their house. If they have a deck or screened-in porch, tell them how you envision using the space. We did that and the sellers accepted our offer—out of multiple offers—within 24 hours.”
Hire an experienced pro. Last year, 90% of millennial home buyers used real estate agents to purchase their homes.(6) Think they’re onto something? You bet! Don’t try to buy on your own. Get the help of a pro so the home-buying process is smooth for everyone involved.
What If I’m Not Buying or Selling a Home This Year?
You may be thinking, All this is great, but I’m not going anywhere anytime soon.We hear you, and here’s what you should know for now:
1. Equity will likely continue to increase by 2–6% each year until 2020.
With most housing markets at low risk for a downturn, the 2018 Housing and Mortgage Market Review estimates home prices will continue to rise for the next couple of years, with annual increases of 2–6%.(7) Who-hoo for sellers! If you sell your house before 2020, you’ll likely still make a great profit. Continue to monitor how much your home is worth to make sure your equity (what your home is worth minus how much you owe on it) is going up.
2. From what we can see, the real estate market is not going to crash.
With such fast-rising mortgage interest rates, some folks are wondering if the housing market could collapse again. Well, it’s impossible to know for sure, but a number of factors indicate a housing crash is not in the foreseeable future and the economy is still strong. Here are some indicators:
- People are spending money.
- There’s a low unemployment rate and new career opportunities.
- All-cash real estate buyers (our kind of people!) are becoming more common.
- Fewer buyers are using interest-only home loans (aka the worst loans possible) that allow you to pay just the interest each month and not the principal.
- Millennials want to buy.
- Taxes are lower.
3. Regardless of your neighborhood, buyers are interested.
Even though buyers in 2019 may be choosy, determined ones might be willing to consider neighborhoods that don’t have easy access to highways or aren’t in close proximity to a big city. If you think you live in an unpopular neighborhood or believe your home isn’t what buyers are looking for, think again. Now may be your perfect time to sell.
If you have any questions, call me. When you are ready to invest, buy, or sell, visit my website or call me direct, Ken Couture, 702-476-0060.