Millennials tend to do things a bit differently than previous generations. It includes the way they approach homeownership and what they expect when purchasing home improvement products. In both cases, technology plays a critical role. Although millennial homeowners (ages 25 to 34) were slow to enter the market, roughly 1 in 3 owned a home at the end of 2018. According to the Urban Institute, this figure is 8 to 9 percentage points lower than earlier generations.
“There’s been an influx of millennial home buyers as older Millennials have had some time to grow in their careers and pay off student loan debt, says Stuart Eisenberg, national director of real estate and construction for accounting firm BDO USA, LLC. The shift from renting to buying is just beginning.
Opting to depend on technology vs. realtors
Whereas baby boomers and Gen X home buyers started their search with a realtor, 99 percent of millennials rely on smartphones or tablets to get general information about purchasing a home. This process significantly alters the dynamic between realtors and potential buyers. Although fixer-uppers are popular, most millennials prefer to buy more expensive, move-in ready homes since they require less work to maintain.
“Digital advances have transformed how real estate is done,” says Kim Howard, a real estate agent and co-owner of Howard Homes Chicago. “Twenty years ago, real estate agents were valued for information. Now, the true value of a real estate agent is through their negotiation skills, relationships with other brokers, and their ability to keep up with the times with marketing strategies and processes.”
Texting is the preferred communication method for Millennials who want to express interest in a property, ask questions, or schedule appointments. Phone calls are usually reserved for urgent matters.
Realtors recognize that times have changed, and they must leverage technology to cater to a new generation of homebuyers. Realogy, a real estate firm that owns Coldwell Banker and Century 21, has partnered with Amazon to offer the Turnkey Home Purchase Service. The potential homebuyer answers a few questions online and is matched with an agent who is most capable of finding them a home. The National Association of Realtors reports that 81 percent of older millennials found their homes through a mobile app.
Where Millennials are Buying
Surprisingly, buyers are forgoing modest homes for larger, more expensive dwellings. Typically, first-time homeowners pay $150,000 to $250,000 for a home. However, one-third of millennials buy homes costing $300,000 or more. After delaying entering the housing market, the preference is for more opulent spaces that encompass the amenities buyers have on their wish list.
Due to the high cost of living in urban areas, 47 percent of new buyers move to the suburbs or surrounding areas. “All across the country, rent prices are generally increasing in urban areas, “Eisenberg says, “Many cost-conscious Millennials are choosing to live in the outskirts of a city or the suburbs.”
Sell Products Millennials Prefer
Although the majority of buyers prefer new homes, 30 percent want a fixer-upper that needs some updates. Yet, both types of homeowners share a need for home improvement products that reflect their social values and lifestyle. Many millennials have jobs that enable them to work from home, especially during this pandemic. Completing projects gives homeowners a sense of accomplishment and lets them personalize their living spaces. Spending more time at home cooking and entertaining has motivated Millennial homeowners to improve their outdoor spaces.
- 35 percent highly agree that now is the right time to spend on home improvements
- 35 percent want to work on outdoor areas
- 42 percent want to update a deck, patio, or porch
Being out of stock is a deal-breaker
Although millennials can easily purchase products online and have them delivered to their door, many prefer to drop by the neighborhood hardware store to buy the products they need and immediately take them home. However, it’s up to the store owner to make the shopping experience pleasant. The expectation is that the store will be clean and easy to navigate. One of the worst things for time-conscious millennials is discovering that the product they came in to buy is out of stock.
Sell Green and Sustainable Products
Protecting the environment is an essential issue for millennials. Selling green products that are not harmful to the environment is one way to connect to these consumers.
Offer a Rewards Program
Millennials want value for their money. Fifty percent of them prefer to shop with businesses that offer a loyalty program. Additionally, when it comes to hand and power tools, they prefer to purchase specific brands since quality outweighs the price in these categories.
Using technology in a Changing World
Millennials are changing how we buy and sell. Their home-buying behavior is continuing revolving—as is their demand for goods and services. Savvy retailers will understand the role technology plays in these consumers’ decision-making processes and offer the products that homeowners need.