The Home Buyer's Korner

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November 22nd, 2014

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Best Cities For Millennial Home Buyers

MilliennialsToday’s real estate agent needs to recognize trends in their markets, as well as understand the wants and needs of would-be home buyers and how to inspire them.

Millennials are noticing the siren song of real estate. After all, mortgages rates are still at all-time lows and in many markets, buying is often cheaper than renting

There’s an old saying that “the more thing change, the more they stay the same” and that hold true in real estate. Millennials like generations before them have been brought up to consider housing as an “investment” and renting as “throwing money away.” 

If your’re a believer in the theory, you might want to read the latest survey by the National Association of Realtors, who rounded up the hot spots where strong job growth and affordable home prices reside.  

According to their report, these are the markets that are well positioned to experience a rise in first-time buyers as the economy improves. And, surprisingly enough, of the 100 metro areas that were analyzed, some of the more popular millennial-based cities didn’t make the cut. 

The most recent group showing up on the real estate radar are millennials. In 2014 they’ve begun to come in their own and we’ve seen a surge in their buying power.  As we move into 2015 and beyond many millennials will begin to considering their first home purchase. 

Twenty-somethings and those in their early thirties are the next big wave of home buyers and they’ve been setting on the sidelines, so there’s a lot of pinned up demand.  Today millennials represent 31 percent of home buyers and historically its been near 40 percent. Expect that percentage to rebound, as the number of homes owned by those in their thirties is projected to increase by 2.7 million over the next decade.

This influential group according to the 2014 Home Buyers and Sellers Generational Trends report issued by the National Association of REALTORS® (NAR) shows millennials, aka “Generation Y” are motivated by a desire to own a home, while 24 percent have already become repeat home buyers and 6 percent have purchased a multigenerational home. 

Their wants and needs in a home are much different from those of the generations before them, yet not surprising. They’re looking for functionality over size and look for features like media rooms or home theaters. Green appliances are also on their radar and they don’t just want a home they want a community. 

They tend to want updated baths and kitchens with low maintenance. They don’t want formal dining rooms and instead prefer big kitchens and open floor plans. Many work from home and need a home office. They’re interested in technology and want to hear about cell and Internet services, not cable and telephone.

It’s a whole new world as the millennial generation joins the home-buying field of clients, and real estate agents shouldn’t try to force them into something they don’t want  when it comes to buying a home, but supply is an issue or is it? 

All the above being said, most home builders have been slow to develop millennial homes and finding one that have millennial features aren’t so common, but a lot of renovation contractors have been catering to this market for a while.

Lets begin with community to see if a home might be a good millennial option. Many older homes are located in great communities, especially in urban areas of the county, but older homes are just that.  They are often outdated and have terrible green or pink bathroom tile. Many haven’t seen a new appliance since the 90’s and the kitchens are closed-in-boxes or short and narrow. However, these homes are wonderful places for millennials to start their path to home ownership, but they need to know how to turn a dated home into a diamond and where savvy real estate agents come in. 

Selling a home these days take more than just getting the listing and hoping for the best, it takes vision. Many millennial home buyers aren’t aware of their options or how to take an older home that looks like what they grew up in and turn it into their dream home. 

When you as a real estate agent showcase your listings to millennial home buyers, you might do well to share some options with them or they’re likely be turned off.  Remember, millennials have different expectation that their parents and most of our inventory of homes were built for them. What’s readily available often isn’t what turns millennial on to housing, so many tune out and wasting their time and money renting. You can change that common misfortune, with a little inspiration.   

Let them know about the renovation programs by doing joint marketing with your favorite mortgage lender and be sure to join one of our local real estate communities, like the one here in New Orleans. Ask your lender partners to create both hard copy and on-line marketing about FHA 203K or FNMA HomeStyle and even USDA home loans, which also allows additional money over the purchase price for improvements and hardly anyone knows about it. 

The next time you’re commissioned to sale a dated or distressed home, come up with some ideas for areas that improves the home’s layout that millennials want. Think about entry doors and their locations. Is the existing door creating functionally or would it be better if moved to the right or left? Both Big and small changes can be financed into renovation home loan and make lasting impressions on would-be home buyers. Leave brochures in the kitchen about updated eco-friendly appliances for millennials to read and include them in your blog.

Get to know remodeling general contractors in your area who can help digitally recreate your listing into a millennial dream home. I can assure you they won’t mind providing you with some marketing support and the software they have to help showcase needed improvements is sure to inspire!

All it takes to become the “Local Go To Agent” for millennials is a little vision and a real estate blog never hurts if you haven’t created one yet, but most of all you need a team [renovation lenders and general contractors] that supports your messaging.

Minneapolis, Minnesota

Minnapolis

Median Home Price: $188,000 

Principal & Interest Payment @ 3.99 Percent: $896.46

Average Rent: $1478.00

Job Growth: 1.5 percent 

Salt Lake City, Utah

Salt Lake City

Median Home Price: $233,000 

Principal & Interest Payment @ 3.99 Percent: $1111.03

Average Rent: $1387.00

Job Growth: 2.4 percent 

New Orleans, Louisiana

New Orleans

Median Home Price: $158,000

Principal & Interest Payment @ 3.99 Percent: $753.41

Average Rent: $1383.00

Job Growth: 2.5 percent

 

Seattle, Washington

seattle-queen-anne_2487_600x450

Median Home Price: $340,000 

Principal & Interest Payment @ 3.99 Percent: $1621.25

Average Rent: $1778.00

Job Growth: 2.6 percent

 

Denver, Colorado

Denver

Median Home Price: $288,000 

Principal & Interest Payment @ 3.99 Percent: $1373.30

Average Rent: $1680.00

Job Growth: 2.7 percent

 

Dallas, Texas

Dallas

Median Home Price: $175,000

Principal & Interest Payment @ 3.99 Percent: $843.47

Average Rent: $1575.00

Job Growth: 3.9 percent

 

Grand Rapids, Michigan

Grand Rapids

Median Home Price: $123,000 

Principal & Interest Payment @ 3.99 Percent: $586.51

Average Rent: $1183.00 

Job Growth: 4.2 percent

 

Austin, Texas

Austin

Median Home Price: $226,000

Principal & Interest Payment @ 3.99 Percent: $1077.66

Average Rent: $1631.00

Job Growth: 4.2 percent

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A SIMPLE HOME SHOPPING INSPECTION TOOL

Organizing your home shopping experience affords a wise decision making process.

This simple home inspection tool makes your ultimate buying decision a smart one.

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