Real estate and the millennialsBottom Highlights, Latest Issue, Online Only, Real Estate Thursday, April 27th, 2017
Real estate brokers eager to capture the millennial market need to change their ways. First, here’s why they should bother.
Millennials are the group born from 1982 until 2004. This segment of the population is huge and represents the largest potential market of homeowners. There are more than 80 million millennials in the United States, and it is estimated that approx. 2/3 of them are currently renting their homes. Just do the math. Even counting on this population pairing up, there remains the possibility of 13 million or more potential sales. What savvy real estate broker could ignore these stats?
Servicing these young people means thinking and acting the way they do, and reaching them where they live. That means social media and making use of all the applications they use on a daily basis. You won’t find these individuals scouting the local papers so the better a broker’s Internet presence is, the more likely will he be to be discovered by this rich cache of home shoppers. Internet wise to the max, millennials will be doing their homework, scouting multiple sites, reading reviews and doing their due diligence. Brokers and mortgage lenders will be wise to follow suit, using sophisticated methods to showcase listings and seize these clients from other less techno competitors. Video walk-throughs are de rigueur today; these shows must be smartphone ready and utilize the best professional technical specs.
Brokers need to know how to position their millennial clients to succeed in a marketplace that does not always favor them. These young people are likely to be entering the market as first-time buyers with less cash to put down compared to their elders, who’ve had more time and transactions enabling them to put aside funds. College and graduate school debt may be contributing to their financial weakness, as well as an economic climate that forces them to take less than optimum professional positions.
The lack of inventory may also be contributing to these millennials being overbid and losing out on properties. Sellers’ market conditions continue to prevail in many of the prime urban markets where these young people may congregate, making it difficult for them to compete. Thankfully, a climate of relatively low interest rates and the willingness of Fannie Mae, Freddie Mac and the FHA to offer low down payment loans, may overcome these home ownership obstacles for millennials.
Even with their student loans, these potential buyers may still qualify to finance and purchase. Real estate brokers realizing the potential of this marketplace may reap the profits. Putting their marketing dollars into technically advanced products, and eschewing print advertising for web and social media, can enable them to tap into a bright future, both for their young clients, and themselves.
Luddites, step aside. It’s a new day and millennials are leading the charge. Get on the bandwagon, brokers, or fall behind.
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