How Are Millennials Impacting the Real Estate Market?
Despite what you might’ve heard about millennials and their love of avocados on toast, the numbers tell us that they’re actually hungry for something else — homeownership. According to a 2021 homebuying and selling report published by the National Association of REALTORS®, millennials have become the largest group of homebuyers in the nation, with many of them purchasing real estate for the first time.
More specifically, 82% of “younger millennials” (those born between 1990-1998) and 48% of “older millennials” (those born between 1980-1989) were first-time homebuyers in 2021. Considering millennials have overtaken baby boomers as the country’s largest generation, real estate professionals looking to grow alongside this fast-moving demographic must be prepared to work with many first-time homebuyers. Additionally, agents need to understand what millennials value in a property, how they prefer to communicate, and ultimately how to reach them.
How Should We Market to Millennial Homebuyers?
Reaching millennial buyers requires blending old-school real estate know-how with new-school ways of communicating. First, it’s important to have a thorough understanding of how millennials view real estate. The Zillow Group’s Consumer Housing Report tells us that:
- Millennials make up 42% of all homebuyers.
- The average number of agents interviewed before hiring is 2.7 (vs. 1.6 for baby boomers).
- 48% of millennials consider online reviews as “very important” (that figure is 30% for baby boomers).
- Even before the pandemic, 88% of millennials engaged with online resources before purchasing a home.
- Only 62% of millennials seek an agent’s advice when determining a listing price.
- 32% of millennials take an active role in the photography of their real estate listing.
- 38% of millennials post their listing on social media.
- Lastly, 59% of millennials view lower commissions or rebates as important.
In terms of homebuying preferences, millennials largely choose properties that are more environmentally friendly, near restaurants/bars, and are closer to where they work. They also tend to look for move-in-ready properties and purchase townhomes at higher rates than older generations.
As for home prices, younger millennials tend to purchase property in the $200k-$250k range while the majority of older millennials purchase homes above $500k, with some choosing to purchase property in the multi-million dollar range.
Leverage Social Media
In today’s market, staying active on social media is a must. Simple things like sharing memes, posting photos of new listings, or dishing out a client success story help keep your brand top of mind for your audience. Most experts recommend posting once per day on each social media platform for maximum engagement and reach.
If at first you’re not seeing results, remember that building a following takes time and discipline. However, the numbers show us that it’s a worthwhile investment. Of Americans aged 18-29, 83% have a Facebook account, 44% use Instagram, and 39% are on Twitter.
Social media usage isn’t exclusive to millennials, either. Older generations, namely 68% of baby boomers and 76% of Generation X, find themselves socially active on Facebook among other popular platforms.
Explore Online Advertising
In a competitive housing market, sometimes a little extra marketing effort can fetch higher sale prices. There are a couple ways to go beyond the usual posting of your listing on social media, including:
Facebook Ad Campaigns - Perhaps the most user-friendly way to reach beyond your followers online, Facebook users can create a free business account where they can put some advertising dollars behind a post or run carousel ads featuring multiple properties.
Instagram Ad Campaigns - Real estate is highly visual, meaning Instagram is a great platform for garnering attention. Like Facebook, which owns Instagram, users can create a business account and execute a campaign featuring a particular property or even several.
Search Engine Marketing - While it’s no secret that companies like Google offer some of the most powerful marketing technology in the world, this type of marketing is typically reserved for brokerages looking to generate top-of-funnel brand awareness or garner web traffic rather than market a specific property.
Create a Website, But Only If You’re Going to Take It Seriously
Having a web presence is a must for reaching tech-savvy millennials, but it doesn’t mean every agent needs their own website. Oftentimes brokerages have invested in a platform that allows agents to have their own page to which they can post listings and link social media posts. As a brokerage, this set-up is a great asset for agents who aren’t as comfortable with technology.
For those who aren’t afforded that option but still seek a strong web presence, there are many website builders available. Websites are relatively easy to build, but having a good, SEO-friendly website — meaning it appears when people search for real estate on Google — is a whole different story.
Generally speaking, Google and other search engines rank websites based on several metrics. For instance, the time a user spends on the site, how relevant the information is, the site’s domain authority, links to internal or external pages, and how many people click through the site, all contribute to where a website appears in a search.
Like real estate agents, Google’s goal is to serve their customers as best as they can. That means a website needs to:
- Be Fast - The amount of time it takes a website to load is critical to how search engines and users view the site.
- Be Visually Pleasing - The goal is to captivate your visitor and gain their trust, especially if this is the first time they’re interacting with your brand. In many cases, this means hiring a graphic designer to give your site and brand a visual tweak if not an overhaul.
- Be User-Friendly - A website that’s to the point and easy to use will generate more leads than an overly complex but visually appealing site.
- Have Great Content - Whether it’s professionally produced videos, captivating photography, well-written copy, or succinct blogs, the content of a website is what delivers information while creating an emotional connection with the user.
- Consistently Optimize - Google’s algorithms change often, which can drastically affect web traffic. Knowing where you stand in terms of ranking for industry-related “keywords” and how to improve those rankings can pay off big time.
To truly be effective in a competitive space like real estate requires a sizable investment in developers, designers, content creators, and Search Engine Optimization (SEO) professionals.
Word of Mouth - Don’t Be Afraid to Ask for Referrals
Real estate technology might be evolving, but that doesn’t mean good old-fashioned customer service should be compromised. According to the National Association of REALTORS® Homebuyer and Seller Generational Trends Report 2021, between 45% - 52% of millennial buyers say they found their real estate agent by asking a family member, neighbor, or friend. Purchasing real estate is still very much an emotional transaction, meaning young Americans dreaming of becoming homeowners need to work with somebody they can trust. With that said, don’t hesitate to ask for referrals if you’re doing good work for your clients.
Millennials are quick to embrace technology, meaning they may consider using a “For Sale By Owner” or iBuying platform. Be prepared to explain that having an agent oftentimes results in better prices, smoother transactions, more buyer/seller protections, help during bidding wars, and an overall better homebuying process.
What Millennials Are Looking for in an Agent
Not surprisingly, millennials communicate differently than older generations. Sending text messages, photos, and links via smartphone are all effective methods of communication. Once a relationship is established, a quick phone call here and there can also be a great way to connect.
Be on Top of Your Communication
We live in a world where many seek instant gratification, especially when it comes to information. To best serve millennials, it’s important to be open to many avenues of communication. The National Association of REALTORS® 2021 study states that 76% of clients ages 22-30 reported that communication via text message was important to them whereas 69% reported that a phone call was important.
Find what works best for both of you, whether it’s texting, emailing, calling, or a combination, and respond in a timely manner to make the homebuying process as smooth as possible.
Play an Active Role
Older generations sometimes look at millennials with contempt, falsely citing work ethic as the cause of their financial challenges, but the fact of the matter is that millennials are working more hours and taking less vacation than any other generation — although student loans can make lending more challenging. As a result, tech-savvy millennials are busy, efficiency-minded buyers who rely on their agents to stick with them through the entire process.
So toss that avocado toast, boost your online presence, and remember that your millennial clients want what everyone seeks from real estate: a safe place to live and grow.