In March this year, a National Association of Realtors report revealed a sharp rise in millennial buyers. For the first time, millennials outpaced Gen Xers and Boomers to become the largest share of buyers on the market – 43% of buyers, to be exact.
After a sobering couple of years, it seems like the tech-forward generation finally “came online” – waking up from the pandemic ready to put their savings behind real estate investments. In some ways, this generational transfer is business as usual. But in other ways, it marks a turning point for the real estate industry, which held a reputation for being tech-phobic and by the books.
In this article, let’s unpack how millennials are shaping real estate’s future through technology, online marketplaces, behaviours and consumer values.
Seeking Choice and Transparency on the Digital Marketplace
Industry practitioners are quickly learning that the old client acquisition model is, well… old. Millennials don’t enjoy feeling like they have no choice in real estate agents, no access to transaction histories, and no access to trusted reviews. They want a bird’s eye view of their options.
This partly explains the rise of Nobul, a real estate digital marketplace aimed at serving consumers. On Nobul, consumers input their criteria for a real estate agent, and the platform combs through relevant agents – with a transparent peek into transaction histories, commission rates, verified reviews, etc.
“Millennial first-time home buyers are our target demographic,” Nobul CEO Regan McGee tells Yahoo! Finance. “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.”
Willing to Risk Big on Sight-Unseen Sales
The National Association of Realtors published another article on millennial consumers this past year – with a slightly more incendiary bent. “Millennials Willing to Blow Budget, Buy ‘Sight Unseen’” covered the recent upswing in remote sales, revealing that 90% of polled millennials are willing to buy a home without seeing it.
But the title is misleading. Millennials aren’t “blowing their budgets” or acting hastily. Instead, they are capitalizing on several new technologies (many of which they introduced) that help facilitate sight-unseen buying. More than past generations, millennials are willing to adopt VR/AR, drone technology, videoconferencing and IM platforms to digitize the real estate buying process. These technologies allow millennials to evaluate their choices thoroughly (and communicate with realtors) without their physical presence.
Shopping Around for Mortgage Options
As we saw above, the millennial shopping mindset is “the more options, the better.” This is a generation that shops from tab to tab on their computer or phone, checking one purveyor’s offerings against the next. They aren’t walking into a department store to grab the first item they see.
Millennials transfer this price-comparison mindset to real estate products. According to Forbes, “86% of homebuyers ages 18 to 34 shopped around for a mortgage compared to 55% of the 55 and older crowd.” And, on average, a millennial looked at six different mortgage quotes before settling. This process puts the onus on mortgage providers to offer competitive rates and extends the overall homebuying process.
These are just a few ways that millennials – now the largest buyers of real estate – are shaping the future of the industry. Before long, real estate may look more transparent, consumer-friendly and remote.
