Millennials have all grown up, have stable jobs, and are starting their own families. They also are now entering the real estate market.
The generation born between 1980 and 1985 was said to be doomed to rent forever. The high cost of higher education, the stagnant pay rate, and the astronomical price of owning a house have contributed to becoming a homeowner an unachievable dream. A sizable portion of the age group (nearly 20 percent) is not interested in leaving the renter’s life.
But, many millennials want to buy their own home. In fact, in 2020, during the pandemic, millennials make up the largest share of home buyers. Many of them are buying a home for the first time. And they are revolutionising the real estate market.
Millennials Leverage Tech to Buy a House
Millennials are digital natives. They witnessed the world turning from analog to digital. As a result, they can easily adapt to new technology. They are more comfortable navigating the world wide web compared to the generations before them.
This is what they are bringing into the real estate market. Millennial home buyers are not going through the traditional process of hunting for their dream house. They have added another step: scouring the internet. A 2019 report by the National Association of Realtors revealed that 81 percent of older millennials in the United States found their house using a mobile app.
The preference to use technology in buying a house became an advantage in 2020. When restrictions were imposed to slow the spread of COVID-19, the traditional processes of buying a home lost relevance.
Luckily, the platforms needed to buy and sell a house were already available before the pandemic. There are home selling apps that buyers can peruse to check their options. The generation used to swipe left and right find using mobile apps for shopping, even for real estate properties, easier and more convenient.
After all, it eliminates the need to drive around the neighbourhood, looking for houses for sale and walking in each open property. An app can give them photos and information about the property for sale.
In a competitive market, millennials are leveraging technology to find the house that suits them. New Zealand saw an unprecedented housing boom in 2020. Despite a global health crisis and mass unemployment in the early months of the past year, thousands of people spent over NZ$1 million (US$705,100) on houses.
Trust in Technology
Many buyers did not have to step into the property before closing the sale. Due to stay-in-place orders and physical distancing recommendations, buyers cannot inspect a property in person.
So, to facilitate the process of buying and selling during the pandemic, many real estate agents utilised technology. Some used virtual reality headsets to allow the buyer to digitally walk around a property without the risk of infection. Others, however, utilised social media. Some agents hosted open houses via Facebook Live or IGTV. Potential buyers were able to see properties for sale without leaving the safety of their present dwelling.
However, this means that a lot of people might be buying a house without first seeing it. Every advice column about investing in real estate recommends that investors thoroughly inspect the properties they are pouring their hard-earned money into. During the pandemic, that is not possible. Buyers have to rely on the agents, trust the seller, and rely on the photos and videos they receive to check for flaws.
To millennials, this is not a problem. Nearly 40 percent of millennials are comfortable buying a home online. The majority of them still want to have at least the option to tour the house virtually before closing the sale.
Moreover, millennial home buyers want to utilise more technology in buying a home. They want access to 3D virtual house tours as well as digital floor plans. They also prefer to shop for furniture, appliances, and even a car via e-commerce platforms.
Millennials do not see making major purchases online as risky; after all, they grew up with e-commerce and online shopping. They know what to check to ensure their security online. They know that it is fast, convenient, and secure as long as they use reliable sites and apps.
Millennials took a long time before they finally ventured into the real estate market. Now, the largest generation around is snapping up houses to raise their families or invest their hard-earned money into. They’re making investments for their finances and future. The use of technology will not be their only contribution. They will continue to influence the industry for decades to come.