There’s an image of millennials that have been created by people in older demographics. Millennials are supposedly a lazy generation, living with their parents, complaining about the way the world is going. Well, like most stereotypes, this one doesn’t hold true under further analysis. The idea of millennials as childish has already become outdated as they age into being the most prominent age group in America.
The implications of this are big in a variety of areas as millennials’ spending power increases, and the weight of their preferences grow. One area that is already seeing the relevance of this cohort becoming arguably America’s most important is the real estate market.
“Millennials are finally coming out of the gate, and it’s not uncommon for the first purchase as a first time homebuyer to be a multimillion-dollar luxury home…”
According to the Orange County Register, millennials now make up the largest share of homebuyers in America at 38%. While millennials acquired their first home later than other generations, this doesn’t mean that they weren’t interested in buying homes. The reality is that housing became significantly more unaffordable in recent decades, making millennials have to wait longer before becoming home-owners. But now, with millennials ranging from 24 to 40 years of age, they’re at an age where they’ve become higher earners, and are thus able to become first-time homeowners.
Millennial preferences differ from some of the previous generations. According to the same report by the Orange County Register, areas like Aspen, Austin, and Montecito have all seen the benefits of being attractive to millennials. These second-tier markets have skyrocketed recently, with Aspen hitting a record high sales volume in the third quarter of 2020.
Millennials differ in many ways from previous generations, but one significant way is that they are not buying starter homes the same way. According to Bradley Nelson, the CMO of Sotheby’s International, who was interviewed by the Chicago Tribune, it is not altogether rare for millennials to make their first home purchase a significant one.
Nelson says “Millennials are finally coming out of the gate, and it’s not uncommon for the first purchase as a first time homebuyer to be a multimillion-dollar luxury home in the U.S. or internationally.” This means that millennials are becoming a vital cohort for the luxury real estate market as well.
Real estate agents and people selling their homes are going to have to gear themselves towards marketing to millennials now. There are a lot of qualities that millennials emphasize that other generations might not have.
For example, environmental sustainability, technological compatibility, and with the pandemic, the ability to work from home effectively. Real estate companies are going to have to adjust on the fly, as if they can’t appeal to this younger demographic, they will lose out on a group that has aged into becoming the number one homebuyers in America.
Long represented as disinterested in home buying and making it on their own, 2020 showed that millennials are just like every other demographic that came before them.
While the real estate market had a higher barrier to entry for millennials than other age groups, as they’ve aged into being higher earners, they’re just as interested in being homeowners. Millennials’ importance will only grow in the coming years as they continue to become the predominant homebuyers in America.