Real estate agents looking for that next big wave of clients just might want to focus their attention on a demographic sometimes known as the “renter generation.” Many of these Americans have been moving from place to place, but they are now ready to put down roots and savvy agents will be in position to capture their business and build relationships that can last a lifetime.
Many couples in this demographic have successful careers and have tired of constant moves throughout a region or even across the country. They are ready to settle down and even start a family.
Many real estate agents in the past have been wary of the millennial generation, which has also been labeled the “renter generation.” The common perception is that they have too much student loan debt to purchase a home.
According to the National Association of Realtors, millennials made up the largest group of homebuyers in 2016 for the fourth consecutive year. According to NAR’s 2017 Home Buyer and Seller Generational Trends survey, baby boomers were 30 percent of buyers.
“That myth that millennials don’t want to own things is not true,” Jeremy Wacksman, chief marketing officer at the Zillow Group told NBC News. “Millennials are not just starting to buy homes; they’re powering the housing market.”
Lawrence Yun, NAR’s chief economist agreed, noting that while millennials have been slow to jump into the housing market, the market is now experiencing an uptick in millennial buyers in 2017.
“This is a good sign, because as home values rise, we want a wider number of people to participate in this housing recovery,” he said. “There’s a pent-up demand and as the economy continues to improve, we expect to see more people in their early thirties, adults who are still living with their parents — clearly not their idea of the American dream — begin to look for their own housing units.”
Real estate agents have been looking at ways to get the attention of millennial buyers by becoming more active on social media and using technology to attract and communicate with prospective clients. These efforts may be ready to pay off.
Today, more buyers of all age groups are starting their home search online. It is no surprise that millennials and Generation X buyers (born between 1965 and 1980) are the most likely to do this. But about 90 percent of millennials still use a real estate agent, according to industry data — although the traditional relationship has changed a bit.
Vija Williams, a Seattle-area realtor at Keller Williams Worldwide, said millennials are using the technology to find what’s on the market, so an agent’s role tends to be different for them.
“They understand the role of a real estate agent, as far as negotiations, contracts and paperwork, but they don’t necessarily need us to find the homes,” Williams said. “Our role is to facilitate the sale.”
According to Nela Richardson, chief economist at Redfin, millennials today are “aggressively” negotiating commission fees with real estate agents.
“They’re significantly more likely than Gen-X and boomer buyers to negotiate with their real estate agents, both on the list side and the buy side,” Richardson said. “They’re trying to drive down those fees as far as possible to make their buying dollar go further.”
Redfin data indicates 73 percent of millennial sellers try to negotiate with the listing agent for a lower commission, compared to 44 percent of Gen-Xers and 24 percent of boomers.
With a number of data points indicating that millennials are starting to put down roots with household incomes on the rise, real estate agents can position themselves to capture this business today.