It’s the dawn of a new year. 2018 is officially here, and we have a bright future to look forward to. Multiple industries have much to look forward to this year, and real estate is no exception. There’s plenty to celebrate and get excited about. With that being said, I wanted to highlight some of the most fascinating and impactful trends that real estate will likely experience this year.
The Millennial Mindset
Real estate agents are quickly learning that they must learn to work with a newer mindset: The Millennial Mindset. Millennials (those born anywhere from early 80s to late 90s) look at housing in a very different way than previous generations. Millennials are, for one, in debt. Several Millennials have a college degree, which is fantastic, however, that does mean that a great deal of Millennials are now in debt due to their student loans. They are incredibly price conscious. Millennials are also very open to communal/co-living situations. They understand that having more people in a home means less pressure on rent price. Millennials are also constantly invested in their digital devices. Real estate professionals are now learning that, in order to reach this new demographic, they must begin to utilize the tools that Millennials use. This means social media, emails, Internet, simplified websites and mobile apps.
Millennials are also very accustomed to living in a world where almost everything is available at the tap of a button. We can now hail a ride, order food, purchase clothing and goods and even handle our bank accounts from our mobile devices and computers in a few easy steps. Millennials see no reason why they shouldn’t be able to do the same with real estate. Having dedicated websites or mobile apps that allow potential home buyers to sell or buy a property is almost a must in today’s age; and if it isn’t yet, it’s getting there.
Short-Term Rentals
This is a growing trend with both Millennials as well as older generations. Short-term rental services, such as Airbnb or FlipKey allow users, and everyday, average citizens, become landlords. You can use your home as a hotel or bed and breakfast and profit! These stays tend to be very short, hence the term, “short-term rental.” As people look for cheaper ways to pay for housing, short-term rentals are the most lucrative market. If you haven’t looked into short-term rentals yet, make sure to do so. The industry has been growing for the last few years and shows no signs of slowing.
Are Millennials Buying Real Estate?
According to Spencer Rascoff, the CEO of Zillow Group, millennials buy real estate far more than people think that they do. In fact, millennials spent $500 billion in real estate in the last 12 months. However, millennials do approach buying real estate in different ways than previous generations.
Millennials often go straight to the Internet for information, and real estate information is no exception. More than any other generation, and more than ever before, millennials are finding both properties and agents online. The internet has made the process of buying a home or investing in real estate easier and more accessible than ever. Instead of investing loads of time in calling agency after agency and inspecting property after property, millennials do much of the home buying process from their computer or smartphone.
Millennials, more than any other generation, are borrowing money to spend on real estate. They often borrow money for down payments from friends and families. While this may not always be a reliable solution, it is oftentimes necessary in order for millennials to get their foot in the door. This is because millennials often have a hard time finding homes that they can afford on their own. This is the result of a variety of factors. Many millennials face student debt higher than in previous generations and find themselves working low paying jobs. Oftentimes, these jobs are not even in the fields that they dedicated time studying to work in. However, by borrowing money from those around them, they have a springboard from which they can jump into the housing market.
Millennials now make up a large part of the real estate market. Although they often face financial hardships greater than those of previous generations as a result of inflation and wage stagnation, they end up having similar views towards home ownership to those of the generations that came before them. While renting is a very popular method that opens up a gateway to home ownership for them, millennials also often take out loans to pay for their properties. While this can backfire (and often results in a lot of debt), the end result is more millennials buying up real estate.
Millennials may not always be putting themselves in positive situations by buying homes, but they often do anyway and now make up a large section of the real estate market.