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As the St. Louis innovation community grows, an influx of younger home buyers are coming to the city. Here’s how real estate agents can find them their first homes:
Despite their spendthrifty reputation, it seems that millennials are finally ready to purchase their first homes. According to a 2017 report from the National Association of Realtors, millennials bought more homes than any other demographic for the fourth consecutive year. Moreover, two-thirds of millennials expect to purchase a home in the next five years, and more than half of them are interested in real estate investment.
It’s true, however, that millennials’ home-buying needs and expectations differ from those of their parents. As St. Louis continues to grow and attract younger residents, the city and its real estate agents must adapt their strategies to accommodate millennials’ preferences and needs.
Who Are Millennial Buyers?
From a demographic standpoint, millennial homebuyers don’t differ wildly from previous generations. Though older millennials may have already bought and sold a house, the NAR study reveals that most are in the process of buying their first home. Two-thirds are married couples, while single women and unmarried couples each make up another 13%. Half of millennial buyers already have children, while half do not. None of this is particularly new or surprising.
What has changed is the financial situation of many first-time buyers. It’s no secret that millennials make major financial decisions later than their parents did, and that trend continues with home ownership. Millennials buy homes at the median age of 31, with a median household income of $82,000. Given that nearly half of them report having student loan debt — with a median balance of $25,000 — millennials’ cautious approach to home ownership makes sense.
Though they’re similar to the rest of their generation, St. Louis’ influx of younger tech workers have some unique needs to consider as well. Many are coming to the city on temporary contracts or to determine whether the city could be a permanent home for them and their families.
Regardless of the tenure of their stay, 68% of millennials anticipate that they’ll eventually leave their starter home. Some may not be looking to buy at all, preferring to rent month-to-month instead. Others may want to occasionally rent rooms on AirBnb or another short-term rental platform. And, of course, access to high-speed internet is a must.
As with the financial component of homebuying, millennials take a measured approach to research, diligently evaluating properties before they ever contact a broker. Armed with laptops and smartphones, they can access most public information about a property from the convenience of their couch. Millennials are more likely than any other age group to start their home-buying process with internet research.
As first-time buyers become more knowledgeable, real estate agents must develop an established digital presence. Technology tools like cloud-based property management software and virtual reality walkthroughs draw potential buyers in and help them narrow down their list of properties, quickly leading them to the right home, apartment, or condo.
Brokerages must also ensure that their digital assets are mobile-friendly — since nearly half of millennials research property on a mobile device — and that they’ve moved paperwork and payments online as well. These adjustments aren’t just catering to millennials’ tastes; they’re becoming best practices for the industry at large.
A Place for Experience and Expertise
A key finding of the NAR study is that all demographic groups — including millennials — want to work with a trusted real estate agent to buy or sell their home. Millennials need help understanding the purchasing process and value agents for their expertise during negotiations.
To accommodate this, agents should take their time walking clients through the steps of buying a home and identifying where they might need help or have questions. Once they’ve built trust with their millennial clients, agents can introduce properties that buyers may not have considered before. After all, St. Louis is a city of unconventional opportunities.
As we grow the business community in St. Louis, more and more first-time home buyers will call the city home. By tweaking their approach and modernizing their processes, real estate agents can help their millennial clients put down roots.