THE WASHINGTON POST – They’re here. For years, real estate agents and builders eagerly anticipated the entrance of millennials into the housing market.
Millennials, a generation now larger than the baby boomers, were battered by the financial crisis as they started their careers and delayed some of the milestones that accompany homeownership, such as marrying and starting a family.
But in 2018, millennials represented the largest cohort of home buyers at 37 per cent, according to the National Association of Realtors’ 2019 Home Buyers and Sellers Generational Trends Report.
While it’s difficult to generalise about what the Pew Research Center estimates are more than 73 million Americans, real estate agents and observers see some trends among millennials. “Millennial home buyers are often looking for a lot at first and then they’re scaling back as they start searching for a home because of high prices and the limited selection of homes in most markets,” said Chief Economist for Realtor.com. Danielle Hale.
Despite the obstacle of low inventory of homes on the market, millennials are not likely to compromise on the condition of the home, which Hale said is in part because of their lack of experience as homeowners.
Brian Kee, 36, and his wife, Eliana Kee, 33, purchased a three-bedroom, townhouse-style condo for USD515,000 in the Shirlington area of Arlington, Virginia, upgrading from the nearby condo they owned for six years now that they have a child. While the Kees looked at single-family houses in Arlington and nearby Virginia communities of Falls Church and Springfield, they ultimately settled on a townhouse about 200 feet from where they already lived, Brian Kee said.
“The single-family homes we saw were small, needed a lot of work and sold fast,” he said. “We liked one in Springfield but realised we would need a second car, so the savings we would achieve by moving farther out would be spent on the car.”
Eliana Kee works at home on her photo business and takes care of their child, while Brian commutes into the District via bus or Metro.
“For us, the neighbourhood and commute were more important than the size of the place,” Brian Kee said. “We also like that it was move-in ready and we didn’t have to do any work.”
“Millennials want almost instant HGTV-approved living,” said Michelle Sagatov, a real estate agent with Washington Fine Properties in Arlington.
“They’re not usually willing to put in elbow grease on making something their own through a renovation. As long as it’s on trend enough, they’re happy to just bring their furniture and their toothbrush and move in.”
Understanding the priorities and preferences of millennial buyers is important to developers and to home sellers who want to target buyers in that age range.
“I tell sellers that there’s a ‘three-strike’ rule with a lot of buyers: If they have to change three things right away, that’s a dealbreaker,” Sagatov said.
“Buyers don’t want to have to do any renovation, especially not right away.” Millennials range in age from their mid-20s to their late-30s, which means that some are early in their careers while others have more buying power and need space for a family.
“As a whole, millennials are very interested in a sense of community and place a priority on the neighbourhood,” said Kerron Stokes, a real estate agent with Re/Max Leaders in Denver. “Younger millennials in Denver are often buying their first condo or a house where they can bring in roommates to share expenses. Older millennials are selling their urban homes and moving toward the suburbs where they can be closer to the mountains and to good schools.”
Lauren Demeter, 31, and her husband, Landon Rordam, 32, who bought a single-family house in Arlington earlier this year, said they quickly realised their initial idea of purchasing a fixer-upper would take too much time and money.
“We had been renting a 670-square-foot, one-bedroom apartment for years and wanted more space,” Rordam said. “The amount of money it would cost to rent something larger was too much, so we decided it was time to buy.”
A few years ago, the couple looked at condos but then decided to wait until they could afford to buy a home they’ll own for a longer time. The couple initially wanted a fixer-upper to invest in, but they decided to look for something that was well-maintained and didn’t require any work.
“We found a 2,600-square-foot Tudor-style home with a detached garage that had already been converted into an office on the main level with a guest room upstairs,” Demeter said. “We prioritised a single-family home with at least three bedrooms and we wanted to be within walking distance of Metro since I work downtown.”
The couple spent more than USD1 million on their home.
In the District of Columbia region, Sagatov says a sense of belonging to a neighbourhood is more important to younger buyers than their distance from work.
“The older generation wants a shorter commute, but most of the younger buyers I work with have much more flexibility in their jobs,” Sagatov said. “They work from home often, take advantage of telecommuting and go into the office a couple of times a week.”
That job flexibility means access to the Metro is less important to younger buyers than access to a fitness centre, parks, coffee shops and restaurants, she said.
“In the city, the availability of ride sharing, bike lanes, the bus system and bike sharing means that Metro is less of a priority than it used to be,” said Trent Heminger, a real estate agent and Executive Vice President with Compass real estate brokerage in Washington.
Hana Nguyen, 34, who works at a financial tech company in the District of Columbia, purchased a two-bedroom, two-bathroom condo in Petworth priced in the USD500,000s.
“I own a one-bedroom condo in Arlington that I’m keeping as an investment,” Nguyen said.
“I wanted to live in the city and to have more space, but I’m also a believer in homeownership as the key to long-term wealth.”
Nguyen picked Petworth because she feels safe in the neighbourhood, appreciates being on a quiet side street yet close to Georgia Avenue and likes the small three-unit condo building more than an impersonal larger building.
Her condo is newly converted from an apartment, which she also prefers for now so she can avoid the need for repairs and renovations.
Pets are more important to urban millennials than parking, Heminger said. Millennial buyers looking at condos ask if the building is pet-friendly and if there are any weight or other restrictions, Sagatov said. If they’re looking at a townhouse or single-family house, they want a yard for their dog, even if it’s small.
“Most buyers put their family’s needs first when looking for a home to buy,” Hale said. “For younger millennials who haven’t started a family yet or even those who do have kids, the family pets are also a priority. That’s one reason many young buyers want an outdoor space.”
Millennial buyers who have been living in luxury rental buildings have high expectations for amenities that they have to revise once they realise that fewer condos have those amenities and those that do have high condo fees, Heminger said.
Once they realise that owning means they may have to give up things such as a rooftop pool, millennials tend to prioritise the ability to have a pet and some outdoor space over other features.
“The outdoor space doesn’t have to be big, but they want to be able to put the dog outside or just sit outside for a few minutes,” Heminger said. “Some millennial buyers are willing to take less square feet inside – or even give up a bedroom – in order to get a little bit of outdoor space.”
In more suburban locations, a slightly larger yard where homeowners can have friends around is desirable. “Outdoor living is a big part of the social fabric for millennials,” Stokes said.
“A space for a fire pit or a covered patio where you can entertain a few friends are ideal. However, sellers should keep in mind that these areas shouldn’t require a lot of time and maintenance, as this is something that repels millennial buyers.”
Tech-savvy millennials like the convenience of technology that they can control remotely, Heminger said, such as the ability to buzz someone in to deliver a package or someone who will walk their dog.
“Millennials grew up in the digital age, which gave them a thirst for instant information at their fingertips and virtual communication,” Stokes said. “Appliances such as smart thermostats, smart doorbells and more that can be controlled from an app are all the rage. Connectivity is king when putting a house on the market these days.”
A simple step that sellers can take is to swap out standard outlets for ones that include USBs for charging, Stokes suggests. A USB outlet costs USD7 to USD9 per switch, he said.
“Constantly being on a smartphone drains a lot of power,” Stokes said. “When your home offers a charging hub or outlet for people, especially in unconventional rooms like the kitchen, they are more likely to stop and take a second look.”
Stokes also suggests hiring an electrician to install an electrical outlet in the garage if possible, to allow for an outdoor refrigerator, charging toy batteries and electrical cars.
“Millennials crave smart security systems that don’t require a monthly subscription,” said Yuri Blanco, broker and owner of Re/Max Executives in Boise, Idaho. “Any new technology that comes at a low cost is a major bonus to this age group.”
Most buyers today, including millennials, want an open floor plan.
“The walls are coming down for millennials,” Blanco said. “For this generation, it’s all about open floor plans. Millennials who are having children want an open area for them to run around and also love entertaining, which means kitchens, living rooms and dining rooms that are connected attract them.”
If you have an older home, Stokes suggests eliminating some unnecessary walls, especially hip- or knee-height walls that used to be popular, to make your home appealing to younger buyers.
“Barn doors and ‘rail system’ doors are here to stay, partly because they don’t take up space by swinging out,” Stokes said.
“Another popular option for new construction is pocket doors that disappear into the wall system and fit into the whole open floor plan concept.” Staging the home to make it more appealing to millennials can include adding some bar stools to a kitchen island or peninsula so buyers can visualise having coffee or drinks there, Heminger said.
“If you have an older home with a formal living room, you might want to stage it as a lounge with a cool bar cart for hanging out or a library, because younger buyers don’t want any formal spaces,” Sagatov said.
In addition, sellers may want to reduce traditional elements in their home as much as possible, such as heavy curtains or elaborate furniture, in favour of simpler design features.
“In recent years, we are seeing millennials prefer modern, sleek designs with clean lines and minimalist aesthetics,” Blanco said. “To them, less is more. Homes that have new, stainless-steel kitchens and simple cabinetry draw millennials in.”
Sagatov suggests that sellers look at new home models and existing homes in their area that sold within seven days to see what’s on trend and do some simple fixes such as upgrading light fixtures and painting. Neutral colours are in, particularly light and whitewashed grey and cream, Blanco said.
“To accompany the neutral colours, we are seeing millennials gravitate toward bolder pops of colour on accent walls,” Blanco said. “An accent wall that is colourful or covered in a unique wallpaper will be enticing to millennials.”
While these design features can entice younger buyers, top priorities for most millennials are the same as any other generation: They want an affordable house in good condition in a convenient location. That’s not surprising at all.