According to Business Insider, millennials are the new seat of purchasing power in North America, and their behaviours are shaping the real estate market.
But what is the industry doing – if anything – to adapt to this demographic shift? By now, the habits and values of millennials are well documented, a mainstay of “millennials are ruining this industry” headlines for the past 15 years. Millennials value tech-driven approaches, transparency and convenience.
In this post, let’s look at how these behaviours are reshaping the real estate industry. If you’re a real estate practitioner, take note. As millennials ascend in spending power to become the most influential actors in real estate, here are a few trends to consider.
Millennials are the first generation of “digital natives,” raised from inception among digital tools and information. Consequently, they’re distinctively comfortable with technological devices, relying on them to facilitate several traditionally manual tasks. They’re also accustomed to quick, accessible information, having been raised with the internet close at hand.
Naturally, those proclivities and expectations transfer over to their real estate approach. Millennials don’t gel with the old way of buying/selling properties, where a consumer relies on their agent as the gatekeeper of information, and the sole resource for what’s fairly priced.
Partly, this phenomenon explains the success of real estate digital marketplaces like Nobul, where real estate agents compete for consumers’ business. According to founder Regan McGee, “Millennial first-time homebuyers are our target demographic.” Speaking with Yahoo! Finance, McGee explains, “Our platform really gives the power to the consumer for the first time ever… When people buy and sell real estate, they want to do it the same way they do everything else in their lives, like traveling or getting an Uber.”
As mentioned, millennials value honesty. A side effect of growing up around cavalcades of information is that millennials are particularly attuned to artifice and attempts at deception – BS, in other words.
According to data culled from several sources (Pew Research, Bloomberg surveys, etc.), the two most important factors millennials list when choosing an agent are reputation and honesty. The same statistics show that only 23% of millennial sellers knew they could negotiate their agent’s commissions and fees. Together, those insights illustrate a disconnect in the industry between the accessibility of information and consumer values.
Writing for Forbes, former RE/MAX CEO Adam Cantos argues that “transparency benefits practitioners as much as consumers. The trust that results is crucial, as each encounter… elevates the entire industry and creates consumers who are more apt to come back… and transact again.”
In other words: to remain viable and successful as millennials become the largest homebuying demographic, real estate practitioners need to start from a place of honesty.”
Having grown up alongside mobile phones, it’s no surprise that millennials prefer to text their questions, queries, concerns and – yes – even bids. Millennial real estate consumers don’t want to wait on a phone tag game, nor are they too keen on driving to an agent’s office to chat.
Some kind of streamlined communication is mandatory. During the client-consumer relationship, most agents are comfortable giving their mobile phone number to clients, while others prefer to compartmentalize their conversations on an online platform. But in the nascent stages of generating leads, it’s wise for agents to wait for consumer contact through a secure messaging platform. Millennials don’t respond well to being badgered by agents.
If you’re looking to break into the real estate practice, or is an industry stalwart looking to evolve with the times, consider these trends as you serve your clients. The industry’s job is to serve its customers’ needs – and right now, there’s no bigger customer than the millennial.
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