If it seems like there are more younger adults entering the housing market in our area, it’s because it’s true. Research by the National Association of Realtors® in their recently released 2022 Home Buyer and Seller Generational Trends report found that millennials (born 1981 to 1996) made up 43% of the housing market in 2021, up from 37% in 2020.
Elizabeth Garner from the State of Colorado Demographer’s office recently addressed the associates of WK Real Estate to discuss population and migration trends in Colorado. Regarding millennials she shared, “Our migrants have historically been young adults in their 20s and 30s. Currently a large share of this age group are millennials who are aging into home ownership. Currently our largest population cohort are 25- to 35-year-olds, at more than 883,000 people.”
We sat down with some of the best and brightest emerging and established real estate professionals in the area at WK Real Estate,
who themselves are millennials or Generation Z. Mike Harris, Ina Sajovich, Chris Gaynor of the Lauren Jensen Group, and Cassie Remington with the Barry Remington Team are all top ranked WK agents, and Amanda Kelley is WK’s Marketing Technology Director.
Let’s talk about migration. According to a recent study by Lending Tree, millennials continue to be part of the Great Resignation/Reshuffling – 62% of Gen Z and 53% of Millennials (62% and 53%) are among the 40% of Americans considering a move in 2022. Is this demographic a significant portion of your clientele?
Mike: I’d say yes. Social media makes it really easy for friends to see where others are living and get a feel for it, helping them be comfortable enough to make the decision to move.
Cassie: Yes, people can go online and see what it’s like to live in Denver or Boulder through a screen.
Ina: Millennials are an experience-focused generation. When they think about location they think about where they can go hiking, and where to go out. Our area is a prime one for anyone looking for a high value lifestyle.
What are millennials like as buyers, and what factors in to their decisions to either rent or buy?
Chris: Millennials are definitely more transient, but they still see the value in real estate investing and are starting to invest earlier. And the recent low interest rates have really helped. I’m always asked about future rentability
– live in it now, rent it later.
Cassie: Mike was right about social media. A lot of what our generation sees, for example on podcasts like Bigger Pockets, is that renting is a bad idea.
Amanda: Investing is so much easier now in general, and with apps like Acorn and Robinhood investing, including in real estate, is cool now. I have a friend not living in the home she bought because she can live off the rental income.
What types of housing, features and amenities do millennials look for?
Ina: I’m seeing some interest in multi-generational housing, planning ahead for their parents to live with them eventually, or buying homes with their siblings. Also unrelated parties, friends purchasing together because collectively they can get more for their money.
Chris: Millennials don’t seem to care that much about amenities, they just want space that can work for their functional needs.
Amanda: Based on my own recent home purchase, I 100% agree with this! And dedicated office space is definitely big right now too.
Mike: Sometimes they need two office spaces. Most millennials don’t want to do anything more than simple work like paint and carpet. They also want a smaller yard.
Is there any one thing that sticks out as being especially important?
Cassie: Dogs are so important to millennials. They’ll tell you the worst part of their day is having to go up and down the stairs or elevator in their apartment building to take their dog outside. It’s often one of the main reasons they want to buy a house, especially if they work from home.
Amanda: That’s so true, and many millennials are choosing not to have kids, but almost all of them have dogs.
The media often highlights the massive student debt the millennial generation has. How does this affect them in the home buying process, and what are they doing to overcome it?
Chris: This is the most crippling debt for our generation because college has never been more expensive. Tuition is so high and then they end up $200,000 in debt.
Ina: This is one of the greatest challenges for millennial homeownership, and will be for Generation Z as well. Median wages here are not trending at the same rate as the housing market, so we are a little upside down. Some clients overcome this with family support, especially to help cover an appraisal gap, i.e when the purchase price is greater than the appraised value of the home, requiring additional cash.
Mike: I’d estimate that 75% of my millennial clients receive a cash gift from family.
Amanda: The strong stock market of the last few years has afforded parents of adult children the opportunity to provide those gifts.
Ina: The need for family financial support excludes people from the real estate market who do not benefit from generational wealth. Unfortunately, this means that the current market frequently excludes those that come from historically marginalized backgrounds, millennials specifically. This barrier to entry will continue to shape the future of the local culture and who lives on the
Millennials seem to be comfortable trusting real estate experts, like all of you. 92% of millennials purchase their home through a Realtor, and 74% of them say that they really want help understanding the purchase process. What challenges do you see as you assist them through the process?
Cassie: Once the reality of our competitive market sets in, their expectations quickly get halved. They eventually adjust down to their minimum criteria and are happy if they can just get something.
Mike: You have to ensure they have all the information. I think they listen to me and then go research online and verify what I tell them with 10 other sources. Eventually they do take my advice.
Amanda: As a recent buyer, we lost out to multiple offers, multiple times. To have more options, we adjusted our search radius to include a larger area, but then it was exhausting. You have a vision, but then you realize it’s not realistic, and you have to rework the dream.
Chris: One of the biggest challenges is that millennials are so used to getting exactly what they want, in that exact moment, where every single criteria is checked. I had a buyer that initially would absolutely not buy something that didn’t have a south-facing window… she finally bought something and it did not have a single south-facing window!
Young professionals in real estate have a lot of choices in the Boulder/Denver area. What attracted you to WK Real Estate and keeps you part of the area’s top independent real estate company?
Ina: Our website wkre.com is great, and I really appreciate the easy seller reports that I can forward to my clients on Tuesday mornings that show the stats and everything I am doing to market their properties.
Amanda: It sounds cliché but WK Real Estate really is a family. We are known for our leadership and our extremely collaborative, supportive and non-competitive atmosphere. It’s great that we have a lot of younger agents, and I think being a very technology-forward company helps.
Chris: That’s my all-time favorite thing. Whenever I’m at the office I can chat with someone who has at least 10 years of experience. Everyone at WK is so willing to be a resource for each other and wants to help. That’s not the culture at other places or at the younger brokerages.