When They Leave Mom's Basement: How to Sell to Millennials

by Jeanne Roberts Photo credit: millenialmindset.co.uk Known for their ability to text 100 words a minute with just their thumbs, post an infinite number of “selfies”, and use Oculus Rift without “simulator sickness”, the Millennial Generation is adaptive, creative, and apparently able to survive even under a crushing burden of student debt. Are they a good real estate market target? Let’s see … Millennial Demographics You Need to Know By 2025, this generation – born from 1977 to 1995 and spanning ages from 19 to 37 – will make up the majority of the workforce. Also known as Gen Y, they are also the best educated and most liberal of any generation that has gone before. Fourteen percent of Millennials are first generation Americans. Most of their parents come from Latin America. In fact, one-fifth of all Americans under 35 are Latino, and many of them are proficiently bilingual. Other first- and second-generation Millennials include Asians (14 percent) and a small but rising population whose parents came from nations like Nigeria, Ethiopia, Egypt, Kenya, and Somalia, and represent about two million people. Altogether, today’s 77-million strong Millennials represent 24 percent of America’s population. This puts them neck-and-neck with the Boomer Generation, which is coincidentally beginning to sell that family home and move to a warmer climate. Could the timing be any better? Opportunities Abound, If You Know What They Want Millennials are more receptive to different cultures, and they appreciate the effect of these cultures in their daily lives. They are, as a result, the quintessential Americans. The exceptions are homesteaders (who follow the back-to-the-land movement) and conspiracy theorists, who see everything from World War I forward as a giant plot by the New World Order. The first group is always looking for land, if not necessarily housing, and the second is impoverished by its obsession. Monetarily, they are coming of age in the worst set of economic circumstances since the Great Depression. They have learned the truth of that old adage, “strength in numbers”, and they tend to band together with their families, communities, and social networks to a marked degree, so “location, location, location” has a far different meaning for them. They might actually prefer the inner city in a brownstone they can renovate. As a matter of fact, many Millennials choose to live in very dense, diverse urban locations, somewhat like the Boomers of the 60’s – who in their time chose Haight Ashbury, Echo Park, Venice Beach, the West Village, and similar neighborhoods as places to call home. Millennials also love distinctive, unusual older homes, duplexes and apartments. What you call homes with “character” they see as an expression of that highly individualistic creativity they value so much. Millennials Financial Preferences and Tendencies They also tend to buy locally, patronize local food and drink establishments, and mix nicely in “mixed” neighborhoods. A former Columbian Farc who raises chickens makes a good neighbor, as does the woman who raises bees on her roof. By all means, paint the house red: creativity and free expression are the raison d’ être of this generation. They prefer “walking” cities to owning cars, so public transportation is very important. They also favor online shopping, which can offer remarkable deals and diverse merchandise, so decent roads over which UPS, FedEx, and the USPS can operate are important if not essential. What is essential are things like libraries, arts and crafts fairs, museums, theater, and ethnic restaurant. Millennials are truly out to sample the world. Thanks to the aforementioned student loans, and the currently high cost of living coupled with a dismal job economy (where more than 94 million Americans are not in the labor force), Millennials are struggling financially. Average incomes range from $25K per year for younger ones, up to $48K per year for those aged about 29-37. Technically, an income like that doesn’t even qualify for a mortgage, but Millennials compensate by a surprisingly high level of education (almost a quarter have a Bachelor’s degree or better), an entrepreneurial spirit, a tendency to hoard (especially money) and the type of savvy shopping that stretches every dollar to at least $1.25. They are not easy to sell, or easy to qualify, but once sold they hang on with a tenacity reminiscent of immigrants in the early 20^th century. Love and Marriage among Millennials They are also optimistic, though not about marriage. They may shop for a home with two bedrooms because they are good friends, even partners, but not because they plan to have children. That – rearing children – is another legacy of the Great Recession, which put Millennials in their parents’ basement in the first place. Those who do have children – mostly women, and almost 36 percent of them – are on the rebound and more likely to pair up while keeping their financial autonomy than they are to get married, so it’s very likely the female half of a pairing will buy the house, or at the very least fork over the down payment. Do not show surprise. What to Expect Shed your preconceived notions – inherited from your parents – about couples, marriages, families, and desirable neighborhoods, and study this demographic carefully. They are your future homebuyers, but if you treat them like you would have before the Great Recession, you may lose them before you have time to draw the next breath.