What is a Millennial and Why Should I Care?

To understand the millennial market, it’s probably important to understand what a millennial is, right?  In the most basic of terms, a millennial is a person born between the early 80s and early 2000s—a generation that came of age around the millennium.  Millennials are one of the largest up and coming generations since the Baby Boomers, with 78.5 million American millennials aging in at 18-34 when 2015 rolled around.  To the real estate market this means a whole new pool of clientele that are now at an age that they might be buying their first homes.

Naturally, with this new slew of millennial buyers hitting the marketplace every day, an agent must adopt modern techniques and approaches to marketing and selling to a new generation of buyers who aren’t as dependent on one on one interaction with an agent.  Social media and the internet as a whole have impacted the ways in which we go about sales, and it’s only going to continue on a changing track from here on out. Evolving along with the changes is much easier than trying to catch up when you’ve already been left behind.

Statistics are key when it comes to buying and selling—and statistics show that millennials are the biggest upcoming generation of buyers and sellers in decades.  According to the Home Buyer and Seller Generational Trend Reports of 2017 from the National Association of Realtors, of these millennials coming into the marketplace:

• 89% will use an agent in some capacity—but due to social media and access to knowledge buyers weren’t otherwise privy to in the past, they may be slightly harder to please.
• 63% of millennial home sellers say they would gladly use their agent again or refer someone else to their agent—this is the lowest percentage of any generation surveyed before.
• 45-50% will find their agent through a friend or family member.
• 35% of the current marketplace falls in the millennial generation, and nearly half of them are ready to buy their very first home.
• 99% of millennial buyers researched homes online before stepping foot in a single open house.
• 60% of millennial buyers found the home they ended up purchasing on some type of mobile device or app.

The average credit score of a millennial is 625, mainly due to student loan default and credit card debt, but that doesn’t mean they are completely written out of the real estate game.  Millennials are more likely to qualify under flexible FHA-insured home mortgage loans and are more likely to buy with smaller down payments and larger principles, paid off over a shorter time period.

So, What Happens to the Market Once Millennials Come of Age?

This new era of buying and selling a home is a major shift in comparison to when buyers and sellers were completely dependent on the expertise of a seasoned agent, but that doesn’t mean the job of an agent or broker is antiquated by any means.  Millennials now make up 32% of home buyers and the pool is only growing every day. As an agent, it is critical to create an online presence to keep up with the modern era of real estate—a tech savvy agent is going to make a much larger impact on the millennial market.

Though millennials tend to arm themselves with backed research, it doesn’t mean they forego using an actual realtor altogether in their homebuying process.  They value a combination of the knowledge they’ve gained through general research alongside the professional and personal guidence a realtor brings to the table.  That means they are actively looking to agents and realtors to help them navigate an otherwise confusing terrain. Agents can use this to their advantage, as they are more likely to come at a sale with a knowledgeable buyer—one who may need less help with the basics, but more with the intricacies that come with buying a home.

Understanding the Needs of the Millennial Market

Being thoughtful of the millennial market in terms of “wants and needs” is just as important as understanding the ways in which technology and social media change the market itself (which we will discuss in the next section).  Millennials have different hopes, dreams, and aspirations than their parent’s generation. They are more interested in bigger cities and downtown areas than almost any generation before them, mainly because they tend to want to be closer to work.

An agent needs to keep in mind the economic situation these young adults grew up in.  While the parents of this generation had buying power at an early age, many millennials have put off investing in major purchases until all the stars have aligned and the deck is stacked in their favor.  They’ve personally experienced many years of questionable economic stability, which is why when they are finally ready to make a huge purchase, they want everything to be as perfect as it possibly can. There is a general lean toward avoiding renovations and seeking out homes with less customization and more historical uniqueness.  Millennials are far more likely to buy in an urban area, with 21% of people under 34 purchasing in an urban market or city central. According to Business Insider, the median income for a dual-income millennial family in Arizona is around $40,000.  Partner this with the fact that most of those people also have tens of thousands of dollars in student loan debt, it is very likely that your millennial buyer won’t want to invest money beyond the purchase price to fix up a house when they can buy one that is move-in ready.

A great strategy when dealing with millennial clients is to focus on AICDC:

• Attention: Grab the attention of potential clients and maintain it
• Interest: Garner interest of potential clients by asking a lot of meaningful questions
• Conviction: Gain the conviction of the client—offer strong favorable opinions/claims and evidence that support those opinions/claims (i.e.-testimonials from past clients)
• Desire: Show your clients housing data numbers and offer special services, like high-end walk-through videos or detailed open houses
• Close: Ask for the close!  Be adamant about your client’s conviction so they can feel adamant in their decision

Selling in the Era of Social Media

As the largest upcoming pool of buyers in the real estate world, the millennial market is commanding a nearly complete overhaul of traditional real estate models as we have known them to this point.  Agents are at a precipice of having to balance the act of maintaining old-school principles while adopting modern sales techniques.

Growing up in a peer-to-peer world, this generation is empowered by a do-it-yourself attitude, giving them a completely different outlook on the most basic concepts of buying and selling.  These are the children of EBay and Etsy—they grew up in a world the encouraged researching before purchasing, and furthermore, getting the best possible price on their investment. Whether they are buying a home or childhood collectables, the millennial generation has mastered the art of using progressive technologies to fulfill their every want and need.  Just as young people have been turned onto an entirely new approach to purchasing, they have also been made more aware of the troubles that can come along with being tied town financially to a 30-year mortgage—they are a generation far more likely to pay more over a shorter time period, or come at the sale with as much cash down as they can. They want a deal, and they need you to help them find it!

Effective marketing for an agent wanting to sell to young people involves sharable blogs and videos—sales techniques that provide a wide-ranging net and reach a broader audience.  A blog or video posted online can garner a world-wide audience, while still only branching out to a specified and more focused pools of buyers. An agent could obtain a client from a world away simply based on the focus of their web content and presence.  Paying attention to Search Engine Optimization, or SEO, can make a world of difference when it comes to website traffic. Ensuring the use of precise and detailed language will often warrant clients to come to you and the not the other way around.

On another note, optimizing social media presence and “online office” outreach apps allow agents to interact with clients and buyers in a way beyond what could have ever been imagined before.  To the benefit of the agent, the freedom these technologies provide are priceless, as multitasking with multiple clients at the same time is now a reality. Enhancing mobile technology allows agents to yield messages, change schedules at the drop of a hate, store vital info about each showing, engage with potential clients interactively, and so much more.  Agents who utilize scheduling apps, messaging apps, and mobile-friendly websites are able to step outside the normal constraints of the 9-5 lifestyle, and in turn can offer something that has been a struggle for decades—time. These modernized technologies allow agents to streamline their schedules and engage with clients at any time of day, and clients and agents who work on non-traditional schedules will rejoice!

It’s not just about easy scheduling and contact, it’s about making your site, your information, and your listings as sharable as possible.  Sharing should be almost mindless—easy enough for a client or potential client to not question whether or not to put the time into sharing. Use simple and clear “share” buttons to make it easy—and utilize the info that can be gathered from who shares with who.

Just a few other ways to incorporate social media and technology for any agent:

• Create a Facebook group to garner leads
• Utilize the “live” feature on Facebook or Instagram to show a property
• Use 360-degree photos and videos
• Build a Chatbot on Messenger that can answer FAQs automatically
• Use excellent and quality photography
• Create multiple landing pages for potential clients to come upon in searches
• Utilize keyword searches

And in the End…

Staying relevant in the ever-changing world of real estate is the main goal of most agents out there today.  Keeping up to date on technologies and changes in social media outreach can make or break a business in the modern age.  Maintaining a prominent social media and online presence is key to maintaining a flourishing business. Garnering clientele takes more creativity than ever before, but the sheer number of clients that can be gained in a short amount of time make the extra effort worth it.  The real estate market is forever changing and keeping up with the times and technologies will always be the best way to advocate for yourself and your business!

When Is It Buyer’s, When Is It Seller’s, and Why?

Once you dip your toes into the real estate world—be it buying, selling, or simply entertaining the idea of either—you will inevitably hear the terms ‘buyer’s market’ and ‘seller’s market’ more times than you’ll be able to keep track of.  While you may hear it said and glaze over, it’s important to understand what it actually means. It could make all the difference when it comes to when and how you sell or buy your home.

First and foremost, the most important thing to know when it comes to the real estate market is, just like any other market based in capitalism, the market’s stance is completely dependent on the laws of supply and demand.  The marketplace will swing between buyer’s and seller’s markets based solely on whether supply outweighs demand or vise versa. The market can fluctuate quickly and unexpectedly, and in some cases, it can be at a devastating loss.  But it can also come at a magnificent gain. It’s all part of the ebb and flow of American business.

You’re probably wondering what difference it makes.  What does it matter to you as a buy or seller if the market fluctuates?  Well, it matters a lot actually. So, let’s explore the who, what, where, when, and why of buyer’s and seller’s markets.

Let’s start with the basics.  Like what is a ‘buyer’s’ market?  Well, it refers to a situation in which the supply of homes on the market exceeds the demand for the homes available.  A buyer’s market essentially means the buyer has the advantage in the purchasing process. A downward pressure on price is created when there are more homes than there are buyers, and it gives the buyer pull in terms of negotiating price.

The benefits of buying in a buyer’s market:

• Houses tend to be priced at lower rates
• They stay on the market longer, so you have more time to weigh your options
• Price wars are common, but start on the low end, so a buyer can bid lower than asking price, in many cases

There is a flip side to all this though…and you’re probably curious about what the alternative outcome is when the roles of supply and demand suddenly reverse.  When the demand for home outweighs the number of homes on the market, the result is a ‘seller’s market.’ It is in a seller’s market that an agent can encourage competitive pricing and will often have to navigate through bidding wars on any given property.  Homes in a seller’s market will often sell at a higher price point than they were originally listed at.

The benefits to a seller in a seller’s market:

• The seller will often get multiple offers resulting in high stakes bidding wars
• It’s the best time to make money off the investment that is your home—you will likely turn a profit
• Staying at or below listing price is very unlikely

So, how do we determine what climate the market is in?  Who gets to decide? Economics tells us a market of any industry can change quite literally from season to season.  Also like any market, there are trends that happen at particular times of year. For instance, there are more homes for sale in the summer.  The weather makes a potential move a lot easier to comprehend and leisurely buyers are more likely to get out look at homes when it’s warmer out.  There will always be anomalies where people are forced to move at less than desirable times, but according to how the market changes historically, the winter tends to lean more towards a seller’s market, while the summer tends to lean towards a buyer’s.

The area of the market you are in or looking in matters too.  Some areas are always trending towards a seller’s market because the population and influx of buyers is so immense. The markets in Southern California, NYC, Seattle, etc. are currently nearly always in a state of seller’s market.  For the time being, these cities are more the exceptions to the rules over the rules themselves, but it’s important to know they exist. Sometimes these exceptions foreshadow major fluctuations on the larger scale.

There are three major differences within the markets and how they affect those who are in the home buying or selling process.

First, expectations.  The expectation on a seller’s end means more money.  On a buyer’s end it means more options and upgrades at a better price.  The seller may have to work harder to push a property in the buyer’s market.  This could mean renovating a home, landscaping, upgrading the curb appeal, and updating the appliances.  This could be a cost for the seller, but it makes their home stand out in the sea that is the real estate market.  Buyers expect a lot from a home in a buyer’s market, and sellers need to come through on those expectations if they want to sell.  The reverse side to that is a seller’s expectation in a market that benefits them—which is essentially taking the highest bid in a hot market.

Second, power.  Where the power lies in a real estate transaction depends on what type of market it is.  If the buyer holds the power, it’s because they have the option to walk away from a home they love, knowing another will pop up in its place.  This is less likely to happen if the seller holds the power. In this case, the buyer is left to make quick decisions so as to not let a property slip between their fingers.

Third, marketing.  In a buyer’s market, the seller and agent usually have to work overtime to make the home stand out among the rest.  They often throw in incentives, be it through upgrades, price reductions, or inclusion of furniture. This often also includes professional staging and photography—even aggressive ad placement.  Anything and everything that ensure buyers will see and love the home. In a buyer’s market, these are non-negotiables. Reversely, in a seller’s market, a bit less of an emphasis can be placed on these marketing ploys.  Seller’s can focus their efforts in on ensuring that their property lands in the hands of the highest bidder and forget about much else.

At the end of the day, knowing what state the market is in is vital if you have a choice as to where and when you’re going to move.  Those the market can change from day to day, the big changes can be monitored through a simple google search. Pull up the homes for sale in your desired area.  If the number is really high, it is a great time to start looking and thinking about purchasing a home. If the number is low, it might be a great time to sell for yourself, but a not so great time to buy.  Asking a trusted realtor can bring you the peace of mind you’ll need to navigate the treacherous world of real estate. Ask one of our many knowledgeable agents about the climate of the market and whether now is a good time to buy or sell.