Home Buying with Generation Y
Generation Y, also known as Millennials, is loosely interpreted as those who were born in the late 1970s to early 2000s. How they approach the home buying process is different than any other generation. What they look for in a house and their general attitude toward the entire process is something that must be understood in order to successfully work with this group.
Profiling the Generation Y Homebuyer
In this generation, the married couple is in the minority. This is a unique generation and one looking for something to support their lifestyle, so it is nearly impossible to speak in generalities with regard to their home buying and mortgage plans. While some non-married couples are now buying houses only two or three years after graduating college, others are happy with the renter lifestyle and are looking for investment opportunities in other areas. Adults as young as 25 are looking to buy their first house because they have at least two or three years of work experience behind them and can financially afford it, thanks to years of living at home with parents or with roommates. At the same time, many in this generation have graduated in a challenging economic time over the last five years and those challenges often result in a significant increase in entrepreneurial ventures when the job outlook is bleak. Therefore, those with an entrepreneurial slant often may delay making the jump into homeownership when they have much of their cash flow and investment into their business venture.
A generation as big as the Baby Boomers, at about 80 million strong, Generation Y grew up with protective parents and tend to have an inflated sense of importance and self-esteem. They are the most educated and technologically inclined generation the world has ever seen, and they have high expectations for themselves. Fewer of this generation are interested in following those required steps or “rites of passage” that are commonly used to mark the step of adulthood. Many of this generation are graduating from college later, entering the workforce later, enter into marriage and start having children later in life than previous generations. However, recent surveys show that this generation also believes homeownership is a worthwhile investment for them and want to proceed with homeownership once they feel they can be approved for the financing needed to make the transition from a renter to an owner.
What Generation Y Looks for in a Home
Technology: Millennials grew up with the rise of the Internet and other technological advances, and they are accustomed to a life centered on connectivity. Now that so many technological capabilities have surfaced from their smartphones, this generation looks for more ways to control their life through the touch or swipe of a finger. Following this trend, Millennials look for houses that are up to date with current technology, so they can control the heating and cooling of the house, open their garage door and turn on their front porch lights from their phones. This generation likes to see home offices and media rooms instead of dining rooms and living rooms.
Millennials are most interested in technology that conserves waste and protects the environment. This draws them to houses that have the technology to save on water and electricity. In a study conducted by the Better Home and Gardens Real Estate (BHGRE) survey, 57 percent of Millennials interviewed said their most sought-out technology was an energy-efficient washer and dryer.
Proximity: Generation Y cares about the proximity of their house to the places they want to be. This goes back to their need for connectivity. They want to be close to their friends, their favorite restaurants, recreation areas, parks and their jobs. This is very much a non-commuting generation.
What Doesn’t Concern Generation Y
Fixer-uppers: This generation is aware that purchasing an older house makes good economic sense; they can save some money buying the house and use some of that money to make the necessary repairs.
The BHGRE survey says that 72 percent of Millennials label themselves as “handy.” The rise of Pinterest and similar websites can be attributed to being crafty, or taking something old and making it new.
This sense of saving money and being “handy” has caused Millennials to move away from the traditional and into the modern home. Some 42 percent go so far as to say they do not care about the curb appeal as much as the technological capabilities that come with the house, as anything outside of that they can do themselves.
This generation has a very can-do attitude. A house that needs fixing gives them the opportunity to make it what they want it to be. If there is any kind of problem within their community (i.e., crime, bad school system), they will work to fix the problem. This shows that this group is resilient and passionate about community.