What They Want and Why
When it comes to real estate nowadays, everything starts online and is a much easier process than it was a few decades ago. The Internet not only allows buyers to view listings, but it also helps them better understand how the buying process works. Although aspects of this advancement are good, the millennial home buyer also faces challenges their parents did not.
“Before I even meet with a client, they’ve already picked out all the houses they want to see,” said Kate Blickenstaff, a millennial herself, who has been a licensed realtor for four years. “Back when my mom got in the business, she would go through and give [clients] the options.”
Kate’s mother, Jane Blickenstaff, has worked in real estate since 1977, and said that times have certainly changed. Back when she first started, the Internet didn’t exist, so she would send newspaper clippings of listings to clients and show them homes from books that only realtors could access.
“We had no photographs…no virtual tours…or anything that we have now,” Jane said. “This generation is so used to getting everything and all the information. They’re much more educated before [beginning the buying process].”
Starting as a realtor shortly after the market crashed in 2009 allowed Betsy Ferguson, who has been a realtor for seven years and is also a millennial, to see the market come back in the Lynchburg area. Not only has she seen the market climb, but she has also noted growing trends among many millennial home buyers.
“They want the HGTV house on a bare minimum budget,” Ferguson said. She added that every homebuyer has to make sacrifices somewhere, no matter what price range they are in.
“You’re not going to get everything you want—it doesn’t matter if your budget is a $150 thousand or $500 thousand,” Ferguson said. Many millennial home buyers, according to Ferguson, have unrealistic expectations, thinking that their money should buy them more than what it really can.
Some millennials are also hesitant to make improvements on their own.
“It’s not true for all of them, but many of them don’t want to do the work; they just want to buy the home with all of that stuff done,” Ferguson said. Often millennials conclude that it is worth paying a little more to avoid home improvement projects and costs.
Ferguson believes that the mindset of many millennials goes back to how they were raised.
“They have this expectation that they deserve something and don’t necessarily want to work as hard for it as their parents did,” Ferguson said. “They see Mom and Dad drive a nice car, and Mom and Dad have a nice house…I deserve that too.” What they might fail to recognize is that it often took “Mom and Dad” more than 20 years to achieve those nice things.
“This generation wants it immediately; they want it now,” Ferguson said.
TV shows and social media have also impacted the industry.
“When our parents were buying, there were home magazines, but there weren’t renovation TV shows and all these things giving ideas…and social media, Pinterest, etc.” Ferguson said. “It’s at the tip of our fingers every day, and it’s ingrained in everything that we do.” This influence can be both positive and negative.
“It comes up almost every time I have a new client…we’re talking about ‘Flip or Flop,’ or we’re talking about Pinterest,” Kate Blickenstaff said. “I think it’s helped people to have more of a vision and gives them more ideas.”
Millennial home buyers are typically more informed than previous generations and expect their realtors to be up-to-date with the industry and technology.
“They want to see that you’re working,” Ferguson said. “I think that is where the expectation differs.” Millennials desire to see what they’re getting for their money.
Times have also changed on the seller’s end of things. Gone are the days when you can simply put a sign in the yard; rather, there are now certain expectations that sellers have.
As a listing agent, a huge part of a realtor’s job today is informing the seller of what buyers are currently looking for.
“Sellers really need to make sure they’re hiring someone who is in tune with what’s going on in the market,” Ferguson said. “It takes more nowadays than just putting a sign in the yard to get the house sold.”
Even with technology making it essentially simple to learn about the market, Jane Blickenstaff encourages anyone buying a home to still go through an agent who can interpret the nuances of the market more accurately than a novice.
“It’s a pretty big investment,” she said of purchasing or selling a home.
The millennial home buyer also faces many financial challenges that their parents most likely did not, such as student loans.
“What I’ve seen really strongly is student loan debt,” Ferguson said. “And that’s scary.” The amount of debt one has will affect the amount of house they can afford because lenders consider one’s debt to income ratio before processing a loan. Even with debt, however, it is still wise to consider purchasing a home versus renting.
“The reality of rent is you’re just throwing it out the window,” Ferguson said. “Real estate, especially in Lynchburg … it’s such a great market to invest in.” Between all the colleges and large companies, such as AREVA and Centra, people are constantly coming into the area.
“Even if you don’t see yourself living there long term, you can easily hold on to that property and keep it as a rental,” Ferguson said. “Rentals are at an all-time high right now.”
Ferguson added that owning a home is a huge responsibility, and young people should make sure they are ready to accept the many responsibilities that come with owning a home.
“They need to understand going in that you have to take true ownership of owning a home,” Ferguson said. “And part of owning a home is you may have to put a new roof on in the first few years, or you may have to replace the heat pump or something. They need to understand that no one home is going to be perfect.”
She encourages young home buyers to make a list of the things they would love to have and a list of the things they must have now.
“It’s fun to dream…Just find that balance of what it is that you need, knowing that some of the projects might not get done right away, and that’s okay,” Ferguson said. “Just enjoy the process of home ownership. Even if it takes a few years to get your home the way you want it, just embrace it.”
By Megan L. House