Millennial Home Buyers: What They Really Want

Millennials love analyzing and making very informed decisions about everything in their life, given the Internet has made this process quite easy.

They have different expectations for their lives and look for uniqueness in all aspects. The majority of real estate markets nowadays consist of a large number of millennial home buyers. In 2018, Millennials were responsible for 1/3 of all home purchases. Millennials will continue to drive the market, especially as they become more financially stable.

It’s important to understand what features home buyers are looking for in a home and to know how to make sure those features are being showcased, especially when targeting Millennial home buyers. Here are the top 4 selling points Millennials are looking for in their home. 

  1. Walkable location and accessible amenities
    • Proximity to work and play options are high priorities to this group. Contrary to popular belief though, Millennials are targeting suburban communities with a short drive to a big city for social interaction. 
  1. Move-In-Ready, Single Family Homes
    • Millennials are eager to swap their rental apartments for single family homes. Homes that require little maintenance appeal to this market so that they may spend weekends relaxing instead of completing repairs & maintenance. 
  1. Energy Efficiency & Technology:
    • Millennial home buyers want to have complete control over their systems. This generation will pay more for automated or voice-activated devices like HVAC systems and appliances. 
  1. Fancy Outdoor Space:
    • Weekend entertainment is especially important to this generation. As such, must-haves include fenced-in backyards, patio areas and outdoor cooking areas. Millennial buyers want to create a relaxing outdoor retreat. 

It is important to understand what Millennial buyers, those born between approximately 1980-1995, want in their next home. Location, community amenities and energy - efficient features all factor into their buying decisions. Since they make up such a large portion of today's potential home buyers, it’s vital you understand the above things they are looking for when shopping for home. Homeowners and real estate agents who understand these things and who know how to highlight them greatly improve their chances of a quick and profitable sale.

Real Estate’s American Dream

The American dream. Owning your own home is the largest transaction an average American will make in their lifetime. Conventionally, as a salesperson or broker, you are the catalyst to make that dream a reality. Showing homes, placing offers, negotiating and eventually making the deal. Customarily you work on commission which incentivizes you to get the buyer into the highest transaction you can. To the untrained eye that customary 3% commission doesn’t look like much but as an agent you know that it can add up to thousands or tens of thousands. In 2018 $80 billion dollars were paid in real estate commissions.  This is where the traditional real estate market exists and where current events seek to shake the ancestral market.

Now, more than ever, social media marketing is crucial to reach those customers. Networking, blogging, creating relationships online will all make or break your business. When you have real estate brokerages that are setting new precedence online by allowing more time for focusing on the customer - whether it’s for the buy or the sale. They offer a do-it-yourself approach, such as providing title services, and securing the best mortgage, ultimately offering the buyer an all in one experience. How can you compete? Get online. Start with a social media marketing course like ours and learn how to open doors to new customers and keep your legacy clients coming back. The lessons in this course will take you through the development phase of your social media presence, and on to a place where you are confidently creating online content that represents you in the best light possible. Aligning yourself with your buyer or seller and maintaining a virtual presence will keep your business and reputation attractive to clients. Using Social Media effectively as a real estate professional takes a certain amount of finesse, but if done correctly, can be a major catalyst for advancing your career.


 

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Predicting the Real Estate Market in 2019

2018 was a fickle year in Real Estate. The year started with sky-high home prices, historically low mortgage rates and a definitive upper hand for sellers. In recent months though, home price growth has wavered, rates have risen to their highest point in nearly eight years, and favor has started to shift from seller to buyer. 2019 predictions are showing that we are moving from an incredibly hot real estate market to a more normalized one. Housing inventory looks to rise back up to 2017 levels, and price growth, while likely still positive, will be the lowest we’ve seen since 2014 or possibly even 2011.

Investors and house-flippers will back away from the cooling market and sellers will have to adjust their price expectations as buyers grapple with rising mortgage rates and already-high home prices. A still-growing economy and increased access to credit will support more home buyer demand, but higher interest rates will make home-buying more expensive, so it’s hard to say whether home sales will stay down or rebound next year.

In 2019, homebuyers will enjoy more inventory and less competition from speculators and house-flippers, which will lead to more people enjoying the benefits of homeownership. It will cost more to borrow, but more people will have access to credit for home-buying. This will motivate lenders to expand their customer base to low-income borrowers and first-time homebuyers. But of course, lenders will charge more for these loans–both to cover the risk of lending to borrowers with less-than-perfect credit and to cover their own costs of borrowing.

Homebuilders will be more cautious about building during a cooling market and focus on building starter homes that are easier to sell than luxury homes. Fewer homes will be built, but more builders will focus on starter homes. Higher labor costs will limit the number of homes built, but, higher wages will increase the demand for starter-homes among working-class Americans. Rates (perhaps three times) in 2019 will increase and push the average 30-year fixed mortgage rate up to about 5.5 percent by the end of the new year.

All in all, housing is set for a slow-down next year, but that’s not necessarily a bad thing.

The medium and long-term prospects for housing are good because demographics are going to continue to support demand. With a slower price appreciation, incomes have an opportunity to catch up. With slower sales, inventory has an opportunity to normalize. A slowdown in 2019 creates a healthier housing market going forward.

https://www.redfin.com/blog/2018/12/redfins-2019-housing-market-predictions.html


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Artificial Intelligence Opportunities in Real Estate

Real Estate, along with every other industry, has advanced from using Artificial Intelligence to improve and support healthier lifestyles for people. In commercial real estate, health-focused principles are more than just trends. They are the beginning of the industry’s promising future. From 2008 to 2017, the number of tech-oriented real estate startups have exploded from a mere 176 to over 1,200 companies. The areas in Real Estate that can really use artificial intelligence to offer healthy solutions are safety, data-driven comfort, and sustainability.

Artificial intelligence in the safety sector of commercial real estate has made a big impact. It provides, for example, better security for those that occupy these spaces. AI and machine learning use anything from voice commands to facial recognition to improve accessibility, security, and infrastructure stability after construction. Eventually, developers will be implementing robots to assist with inspection and repairing damage without utilizing human workers, making it safer for everyone.

Real Estate companies have realized the usefulness of AI data and sensor technology to provide higher comfort and more efficient spaces for consumers. Buildings can become personalized for monitoring, home safety and even senior care. For example, motion sensors can track the tenant’s daily movements so it can then adjust door locks, faucets, electronic devices and monitor optimal temperatures for each tenant. Even though these are simple solutions consumers will enjoy focusing on bigger things while your home adjusts to your comfort.

In Manhattan AI has been implemented in commercial structures already, one such project is the Empire State Building. It currently collects data to identify the buildings energy efficiency so adjustments can be made to keep this historical monument standing and useful for as long as possible. It’s not just HVAC systems and lighting controls that AI can help with. It can also identify roof and insulation issues during construction and water usage patterns which can then be used to identify the best materials to use during construction to offer energy efficient resolutions.

In time, Artificial Intelligence can provide the Real Estate market even more opportunities to make a sale by offering a safe haven with technology both inside and outside of the home.


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Why Would A Hospital Get Into The Real Estate Business?

A 2008 initiative by the Nationwide Children’s Hospital, located in Southern Orchards Columbus, began investing in neighborhood homes with a program called Healthy Neighborhoods Healthy Families (HNHF). In partnership with city and community groups, they are helping residents renovate vacant homes for resale, building affordable housing, and offering grants to homeowners to fund home renovations.

Increasing evidence points to a correlation between living in areas of concentrated poverty and health. The doctors at Nationwide Children’s Hospital, like Dr. Kelly Kelleher, saw this first-hand. “Houses that are falling apart, plumbing problems, mold, rat infestations, and violence. You see 26 kids a day, and maybe two-thirds of them are in these desperate straits. The impact on kids goes beyond toxic living conditions like mold and lead,” says Kelleher. The stress of living with violence, racial segregation, and other unstable living conditions leads to what researchers call “the neighborhood effect.”

The hospital is treating “the neighborhood as a patient.” They hope that by providing children with safe and stable housing, they can help prevent many health conditions through physical and socio-economic environments. According to NPR Illinois, “the hospital-led partnership built 58 affordable housing units, renovated 71 homes, built 15 new homes, and gave out 149 home improvement grants between 2008 and 2018. With additional grants, it also built a 58-unit housing development combined with office space.”

New changes in Medicaid reimbursement serve as a motivation to invest in community projects like housing. The fee-for-service model where hospitals are reimbursed for each procedure is losing popularity. A newer trend of states funding health organizations with a lump sum of money to help manage someone in a population helps investment in preventative care. One example of preventative care being a healthy place to live.

Some positive metrics of the neighborhood are the dramatic reduction of murders and that high school graduation rates have risen. Nationwide Children’s Hospital and Dr. Kelleher are also studying metrics on the number of emergency room visits, inpatient days, and the various types of problems that children present at the hospital. But it may take more time to show signs of improvement.


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