Guess Who’s Coming To Real Estate? Millennials, And They’re In It For The Long Haul

Written by Posted On Friday, 10 July 2020 05:00

For years, exasperated brokers saw millennials - the nation’s largest generation, according to Pew Research - as a demographic too busy, too cash-strapped, or too rooted to a lifestyle to dive into real estate as their parents had. 

“High prices, student loan debt, and the lure of city lights kept many millennials grounded in their mid-city rentals,” noted California agent Jennifer Branchini, a millennial herself, past president of the Bay East Association of Realtors, and a top producing agent with Better Homes and Gardens Reliance Partners in Pleasanton. 

But now, Branchini said, pandemic or no, they are jumping into the market in surprising numbers.

 “This is, for the most part, an employed and well-paid generation,” she said. “They tend to hold technical or white-collar jobs, and now many are working from home, which gives them greater flexibility. Add to that today’s rock bottom mortgage rates and low or no-down first-time buyer programs, and they are flying in off the sidelines.”

Realtor.com’s 2020 Housing Market Predictions, published last December, even before the coronavirus swept in, suggested that the 4.8 millennials now turning 30 would be buying the bulk of U.S. real estate this year as their needs and lifestyles changed.

Broker Lori Arnold is not surprised.

“I think we misread the generation,” said Arnold, owner and president, Coldwell Banker Apex Realtors, Dallas, Tex. “Millennials have typically married later in life than previous generations - and while many did leave school in debt, they’ve been working for years and doing well financially. Now, as they transition to marriage and family, they are ready to own their own homes as did the generations before them.”

The COVID-19 era is launching a path toward permanent change, noted Logan Link, another millennial and a highly successful agent with Compass Realty in San Francisco. Chief among these changes is the way Americans will be working.

“For years, people working in the city chose to live where their jobs are,” Link said. “The pandemic has opened their eyes to change. With working from home at least part of the time more likely over the long haul, they are ready to ditch the traffic and trade their rented apartments for larger spaces farther from town in the more affordable suburbs.” 

If anything, Logan said, the pandemic has given them a sense of urgency.

“They realize that cities are a lot less safe health-wise than the suburbs,” she said. “The bars and restaurants they used to frequent, the theaters and so much of city life they loved, won’t be available for who knows how long - and months of quarantining in their little apartments have made them re-think what is important to them.”

Many of Logan’s millennial buyers, she said, “now have an itch to garden, to cook their own fresh meals, even to raise chickens. “They want space, they want to raise families in safe spaces, and they are ready to brave the commute if they have to.”

Many, she added, are able to pay cash and close quickly because they have no loan contingency - a key advantage in today’s competitive market, where ten or fifteen offers on a single property are typical in many markets. 

But as attractive mortgage rates and low inventory fuel buyer competition, millennials coming into the market during the pandemic face many of the same challenges as any other demographic.   

“Most of our first-time buyers want what we refer to as, ‘ready to wear’ condos or homes in the low-to-mid priced range,” said Deborah Ballis Hirt, an active part of the Ballis Group, Compass Realty in Chicago. “That’s where competition is keenest because there aren’t enough homes to accommodate demand.”

In Texas, Arnold agrees.

“Millennials buying for the first time want family-friendly homes that are updated and in top condition. They want yards, they want pools, they want smart technology, and they are willing to pay premium prices if they have to.”

The good news for agents is that novice buyers need professional guidance.

“They do their homework ahead of time in terms of locating properties that interest them,” Ballis-Hirt said. “But when it comes to negotiating, and navigating through the buying process, they rely on us for advice and support.”

Many agents who’ve stayed connected with past clients and others as coronavirus fears took hold are reaping the often unintended, but welcome loyalty of those now entering the market.

“Much of my business today is coming from referrals,” said Branchini, “and that includes getting listings from sellers I’ve been talking with and reassuring about the state of the market during these past few months.”

Pre-pandemic research predicted millennials would comprise more than fifty percent of American buyers in 2020. Rapidly changing priorities and social attitudes are likely to take that number higher.

“I’m excited about the second half of the year,” said Link. “I expect to be working harder than ever. What a great time to be selling real estate!”

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Barbara Pronin

Barbara Pronin is an award-winning writer based in Orange County, Calif. A former news editor with more than 30 years of experience in journalism and corporate communications, she has specialized in real estate topics for over a decade. She is also the author of three mystery novels and two non-fiction books.

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