As a homeowner, it is important to understand who are the potential buyers of your property – this is critical to understand if and when you decide to sell. That is why this month we are hosting our generation trends series in which we will outline each generation, including their buying preferences, transactions in the market, and how they are impacting your home’s value.
Before we get started, let’s outline the five current generations participating in the housing market: Gen Z (born 1999 – present), Millennials (born 1980 – 1998), Gen X (born 1965 – 1979), Baby Boomers (born 1946 – 1964), and the Silent Generation (born 1925 – 1945). As of 2019, the National Association of Realtors identified that Gen Z made up less than 1% of home buyers, so we will skip ahead and start our series with Millennials.
Who are Millennials?
Currently, Millennials make up approximately 25% of the population. They are aged 23 to 39 and about a quarter of them are reported to have already had children. They are a generation that has shifted their focus from material items to experiences and environmentally friendly purchases. In fact, over 35% of this generation believes in spending more for something they believe in rather than buying at the most discounted price. This mindset has translated into their purchasing characteristics when it comes to home acquisitions.
What characteristics in the home are they focused on?
The first factor to consider when selling to this generation is that a majority of them are first time home buyers. They are moving into their first home for a variety of reasons, including that they are starting a family or that they have finally established a solid career path with stable income and can now afford to purchase. Either way, they are making a big step into adulthood – unfortunately, many do not have the 20% down payment necessary for a home purchase. Therefore, they are turning to FHA (first-time home buyers) loans to acquire financing. This means that they have less cash upfront for the home and may be more particular in what they are seeking.
Since they are more focused on environmental causes, they are also focused on finding homes that are eco-friendly. This includes houses that have energy efficient appliances, HVAC systems, and those that have been upgraded to reduce their carbon footprint. This characteristic partnered with the fact that they may have a smaller budget can make it challenging as a current homeowner to appeal to their needs.
The type of homes that they are buying are similar to other generations though; they are trending towards purchasing in suburban areas, many moving out of the urban communities to start a family. They are also focusing on buying single family homes (with the exception of the small percentage moving into cities).
It is important to note that Millennials can be split into two categories: the younger ones and the older ones.
The younger participants in this generation tend to focus on the quality of the neighborhood (easy access to restaurants, activities, etc.) and a shorter commuting cost to their place of work. Those that are older tend to be focused on finding homes that are convenient to friends and family, located in a friendly community with a good school district, and those that have a
family-friendly feel to the neighborhood. Some of those that fall into the second category are also purchasing their second home; therefore, they are more particular in the upgrades and amenities the home has to offer. They are using their equity from their first purchase to upgrade to a home more suitable to their demands.
However, these characteristics do intermingle depending on the individual.
How does this impact you, the homeowner?
As a homeowner, it can be difficult to appeal to this audience. Nevertheless, it is important to know that they are making up more than 30% of current home purchases, so they are a majority of the buying pool. If you want to appease to this generation focus on aesthetics and eco-friendly factors. Complete upgrades in the home that improve energy efficiency, create an open space concept in the home by knocking out walls, paint the walls a neutral color, and make the yard visually appealing.
Skip the sale….
If you don’t want to worry or hassle with any of the activities associated with selling a home, consider selling to an all cash investor instead. We are Gulf State Homebuyers and we buy homes all-cash from homeowners just like you. We buy in the Baytown/Houston area and we offer competitive prices. Now is a great time to sell, but many people lose interest because of the process of selling. So skip it today and contact us today for your free home evaluation!