Millennials Most Interested in Luxury Real Estate
Author Catherine Yang wrote about Millennials and their purchasing of upscale real estate in “Millennials Most Interested in Luxury Real Estate” for the Epoch Times at http://www.theepochtimes.com/n3/619239-millennials-most-interested-in-luxury-real-estate/.
We real estate brokers frequently read about how the Millennial generation eschews cars, seek to rent vs buy their homes, are all but broke due to the economy and student loans, etc. This (rightfully) concerns a large number of brokers. However, my personal observations of Millennial behavior never seemed to mesh with mass media reports.
This article verifies five things I’ve observed about Millennials in the field:
a. Millennials are not into large for large’s sake. Having observed their parents’ struggles and the increased cost of living, most have no desire to be a slave to huge yards, struggle with ever-increasing utility bills, and don’t want the risk of huge mortgages. “Living large” is out. “Living smart” is in. Tip: Sellers can better market their property to Millennials by noting upgrades that are energy efficient (including the upgrade’s original installation cost). To combat concerns over a large yard, one of my sellers purchased an old used lawn tractor for $200, had it repaired for another $200, and threw it in with his house. This simple $400 investment pushed potential buyers off the fence and got them to buy an upscale home on 5+ acres when the buyers originally said that they wanted one acre at most.
b. Luxury is in utility. The author Yang mentions steam showers, wine rooms, and built-in cappuccino machines. Yes, but the part about Millennials desiring customizable and low-maintenance properties and flexible/dual-purpose rooms is even more accurate. This is a busy generation who demands that their homes fit their lifestyles, not the other way around. Tip: Some of my wisest sellers have used virtual staging to show the multiple potential uses for rooms. With virtual staging, it’s easy to design and redesign a room with a minimum of effort.
c. Condos are becoming popular with Millennials. This generation does not want to worry over maintenance and upkeep (and the associated costs) of a single family home. Also, being more used to and comfortable with “public” goods and services versus “private” goods and services, Millennials love the convenience and low cost of common (shared) amenities like pools, hot tubs, and exercise rooms. Tip: Condo sellers must market common amenities! Advertising should discuss what a relief it is to be free from expensive roof repairs, clogged gutters, bad foundation walls, wasting time on yard work, and avoiding lawn mowing and snow shoveling. Some buyers respond especially well to understanding that traveling is as simple as locking the door and going to the airport.
d. Hand in hand with low maintenance, Millennials are not fixer-upper people or repair specialists. They rarely have the time or interest in learning how to do these things. Tip: Wise sellers have their homes clean with broken items repaired prior to listing! Having a pre-listing inspection is vital to finding potential problems before they become real problems. While all buyers appreciate homes in excellent repair, it is vitally important for sellers targeting young Millennial buyers. This can also include inexpensively replacing very dated elements like 1970s orange counter tops or harvest gold linoleum floors.
e. Though Yang’s article doesn’t mention this trend, my 20-something to early 30s buyers have a different view about their home’s location. One successful Millennial buyer summed it up by saying “My mortgage is deductible. My gas and [commuting] time aren’t.” Millennials are returning to urban areas, although most return with eyes wide open and questions about private schools and area crime rates. Even suburban Millennial buyers seek suburbs closer to the city over exurban living. Millennials place heavy value on their free time and most see commuting as a waste of that time. Tip: To avoid negative perceptions over location, smart sellers include a simple list of amenities, large employers, and popular municipalities with one-way distances to/from the home. If area roads generally have low speed limits, distance should be noted in miles. If area roads have high speed limits, distance should be noted in minutes.