Millennial Generation Home Buyers Favor Living in the Twin Cities
November 12, 2013
Glenn Crellin, a nationally recognized real estate expert and associate director of the Runstad Center for Real Estate Studies, says millennial generation home buyers are plentiful.
The study conducted at Washington State University finds that millennial prospective home buyers are not deterred by the recent recession. Also a former economist at the National Association of Realtors (NAR), Crellin's published paper in the inaugural issue of the Journal of the Center for Real Estate Studies and by REALTOR® University’s Center for Real Estate Studies is well respected among housing experts with credible authority on the subject. Their study help Twin Cities real estate sellers know young homebuyer preferences when buying a home.
This line of thinking has a compelling logic to it but a researcher at Washington State University says it doesn’t hold up to scrutiny. He conducted an analysis of U.S. Census population figures and also of data from the America Community Survey, which is an affiliated Census research project, and found young households actually have higher homeownership rates than baby boomers and Gen Xers when they were at a comparable stage in their lives. He also conducted a survey of young people in real estate classes at his university, a group that’s predisposed to be interested in real estate, and says this group’s intention to buy property grew over the course of a semester even though the downturn was examined during the period.
The Twin Cities is Attracting Millennial Home Buyers:
If you have owned your Twin Cities home for some time and are now looking to sell it, perhaps Twin Cities housing market changes mean that you should target Twin Cities real estate buyers of a different generation than yourself. Knowing how to integrate this selling strategy may be central to your selling success in the current real estate market. Many of todays buyers are know as the "millennial generation" home buyer. This refers to individuals born between 1978-2000 or those who currently are age 35 and under. By 2014, millennial spending they will account for 36% of the U.S. employed residents. Enhancements that can be made to your home to attract millennial buyers have transitioned from some traditional hone features to include items like rainwater harvesters, skylights and sun tunnels. Gen Y's buyers are regarded as wanting instant gratification and it reflects in the manner in which they spend their money.
Millennials Rely on Friends' Financial Habits to Determine Their Own
According to a New Survey Finds Millennials Rely on Friends' Financial Habits to Determine Their Own, if you're 25 to 34 years old, depends on your friends, according to a new survey from the American Institute of CPAs and the Ad Council. The study's conclusions show that the Millennial generation has decided opinions on where they want to live and what type of home they wish to buy.
However, the national poll found that three quarters of this generation, or 78 percent, duplicate their friends' financial habits over independent housing date research to make their own housing decisions. The majority or 66 percent of Millennials are giving their peers preference as to where they live; 64 percent say the same thing about what they wear. Nearly two-thirds experience pressure to keep up with the types of places they eat and the latest technology devices they carry and depend on.
Millennial Buyers In Urban Land Institute and the National Association of Realtors Study
Of shock to many, in the survey jointly conducted by the Urban Land Institute and the National Association of Realtors, Millennial preference is clear for single-family homes. In separate surveys conducted between 2007 and 2011, Millennial generation home buyers overwhelmingly, 65-75%, wanted to buy single family homes versus a apartment or other housing options.
Urban theorists such as Peter Katz maintain that millennials have little interest in returning to the cul-de-sacs of their teenage years living growing up in their parents home. Manhattanite Leigh Gallagher, author of the predictable anti-burbs broadside The Death of Suburbs, asserts with certitude that millennials prefer more eco-friendly, singleton-dominated urban living.
Millennial Buyers In University of Minnesota’s Humphrey School of Public Affairs
"In order for Minneapolis to succeed, we need to catch up to our peer cities in the contest for the best and brightest young people looking to start their lives and careers and the businesses that follow." according to a September 28th Star Tribune article by Scott Dibble and Frank Hornstein. Dibble is a member of the Minnesota Senate and Hornstein is a member of the Minnesota House of Representatives. Other legislatives share the same focus of ascertaining Minneapolis Millennials choice to live and work in the Twin Cities metro. The University of Minnesota’s Humphrey School of Public Affairs conducted a series of conversations with Twin Cities home builders and business executives to research strategies for attracting a wide range of affordable housing choices
and living-wage jobs to transit station areas.
New Urbanist designing homes recognize that a strong consciousness exits among home builders seeking the Millennial generation niche. Twin Cities home sellers can market their home's advantages as well when offering a location that meets the need for living in walkable neighborhood destinations and easy transit access. Millennials - an infamous group of young men and women born between 1979 and 1994 — are noted for passionate, unpredictable, narcissistic, disruptive, giving, and want easy transportation between home and work.
Millennials Are Living With Their Parents Longer According to Trulia
Household formations typically number 1.1 million a year, meaning, 1.1 million new households are added to the U.S. every year, normally because of population growth. With the recession, though, that number collapsed, falling all the way down to 450,000 in 2008. In the first quarter of 2012 and 2013, formations were still historically low at 521,000, according to Truila.
A big reason for the slow formation of houses, explained Jed Kolko, Trulia’s chief economist, was the historically high number of Millennials who lived with their parents, rather than moving out and forming their own households; thus, housing formations remained low, and the number of 'missing households' (households that would have been created in a healthy economy) began to accumulate. "The likelihood that young people live with their parents is just 8% back to normal (when comparing 31.3% in 2013 with the worst point – 31.6% in 2012 – and the 2000-2007 normal of 27.4%)."
Minneapolis younger residents are choosing to marry later and are having smaller families, which changes their housing preferences. By 2025 a larger percentage of Minneapolis suburban households are expected to have no children. Millennials, some of which are economically strapped college debts and have witnessed our recent Minneapolis metro housing crisis, say they prefer to live in urban environments.
According to Pay Scale, Twin Cities Gen Y's who may buy a home:
* Have a median salary of $42,800
* Have a average commute time of 20.4 minutes to work from home
* Make up 23% of Minneapolis population's employees
* Rank Minneapolis as the 4th best city nationally in which to work and live in
* Policy Mic rated Minneapolis 3rd as a great place for Millennials to live. Minneapolis is also renown for its progressive and creative culture. Nearly 40,000 people live downtown, making it a place of nonstop hub of top quality entertainment and shopping buzz.
Home Improvements That Can Attract Millennial Buyers:
Savvy Homes That Fit Today's Trendy Designs: A 2013 survey finds that 65% of millennials believe that losing their phone or computer would be more detrimental to their daily lives than if they cannot locate their set of wheels. Whether it’s a "just-push-a-button" home sound system, lighting, irrigation, HVAC or home security system, integrating home trendy technology will gain your home's appeal to the pool of millennial generation home buyers. Ninety percent of Millennials frequently search to buy a home on line as compared to less than half of Silent Generation buyers. Younger generations of buyers were also more likely to find the home they purchased through the INTERNET; older buyers most often learned about the home they purchased from their real estate agent. They want remodeled kitchens with granite countertops, stainless steel appliances, and prefer hardwood flooring, according to Stuart Michaelson, president of Windmill Homes.
Home's Designed to be Maintenance Free: This generation more than any other has grown up as the "right now generation". Familiar with fast food, faster checking, immediate and update information at their fingertips on their technology devices, they seek the same immediacy aspect by preferring the maintain-free home siding and windows found in newly constructed homes in general. If you are a Minneapolis home seller, your home improvements may want to lean in the direction of maintenance-free home features such as clog-free gutters, composite decking and easy-clean windows.
Home With Lots of Storage: Simply put, the millennial generation has a lot of “stuff”. Homes can never have enough storage. Whether it’s usable attic space in the home or garage, built-in closet shelving, cabinet space or not having enough storage can be a factor that allows other homes to get chosen ahead of yours.
An Open Home Layout: In various facets of their lives, millennials appreciate openness and this characteristic translates into their list of desirable features in a home. Because millennials are often at the preliminary or early stages of starting a family, it’s helpful for them to see rooms that can be utilized for multiple purposes such as a home office that can be converted into a guest room or a nursery.
Interesting Paint Colors And Textures: In the past, it was customary to opt for white walls when selling your home. This is no longer the case. Nowadays, millennials prefer painted walls which add interest. No longer are bold colors taboo, however, if choosing this course, it’s to your benefit to pick the brain of an interior designer or professional painter to ensure that your selection isn’t too wild, such as fire engine red or chartreuse green.
Homes With Social Entertaining Space: As we have fewer married couples living with children in homes, and more Y Gen single homeowners, some focus has turned to using a home's spaces to host guests. Home improvements such as finishing your basement, adding a media room, and designing your home for outdoor entertaining will increase your home’s appeal to Twin Cities Millennial generation home buyers. Swimming pools and hot tubs which senior single-family homeowners perceive as expensive and a chore to maintain, as more often on younger generation's wish list when searching for real estate listings.
Green-Friendly Homes: Having been raised by Baby Boomers, a more environmental aware generation who precipitated the green movement, millennials may have daily lining's impact on our natural resources more upper mind. Millennial generation home buyers prefer environmentally friendly products in their home's construction when possible.
Energy Efficient Eco-Conscious: Going hand in hand with the preference for Minneapolis green-friendly homes, millennial buyers have an eye out for homes that are more energy efficient which is a smart way to lower home energy bills. High in demand energy efficient features include: windows & doors, appliances, and insulation. Having an energy audit of your home that can be provided to potential homebuyers is something that would apply to the millennial real estate market.
"Homeownership is an investment in your future, and is how many younger American families begin to accumulate wealth. The oldest of the Millennial generation are now entering the years in which people typically buy a first home, and despite the recent downturn, homeownership still matters to them. The sheer size of the Millennial generation, the largest in history after baby boomers, is expected to give a powerful boost to long-run housing demand, though in the short-term mortgage accessibility and student debt repayment remain challenges." ~ Paul Bishop, NAR vice president of research
Download the National Association of Realtors report on Millennial Home Buyer and Seller Housing Trends for 2013.
Download the National Association of Realtors report on Millennial Generation Home Buyers
Download the University of Minnesota and Metropolitan Study of Twin Cities Developers and Business Leaders on Housing for Millennial Generations and More
Download ULI's report on Millennial Generation House Shopping In the Digital Age
For a widely recognized Twin Cities Realtor for excellence in customer service and industry knowledge, contact Jenna Thuening, owner of Home Destination. I can help you list your Minneapolis home for sale, and determine if and/or how the millennial generation home buyers are or can ideal for your home. Call me at 612-396-7832.
Jenna Thuening, a Twin Cities residential Realtor reports on news and stats of Millennial generation home buyers
Eden Prairie MN 55344
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