As a group, the Millennials have been slow to enter into home ownership. But as more and more take that plunge, it is having a significant impact on the real estate, home building, and remodeling industries that will only increase over time. Professionals in these industries need to get a thorough understanding of the individuals in this segment of the population and plan to cater to their needs and wants to win their business.
The Millennials, also known as Generation Y, are those individuals born between 1980 and the early 2000s. The Millennials are the most diverse and most educated generation. But more importantly, they are the largest generation in the United States, accounting for one-third of the U.S. population in 2013. Because they represent such a large portion of the population, Millennials will have a substantial impact on the economy for years to come. Many Millennials were in school or just beginning their careers when the recession began in 2007 and struggled to find jobs. Many are still feeling the effects of the recession, carrying unprecedented student loan debt and lackluster credit. These factors have contributed to Millennials’ reluctance to enter into home ownership.
But as unemployment rates drop and they become more settled and established in their careers and lifestyles, Millennials are slowly beginning to look toward owning their own home. Even if only a small percentage of this generation is currently entering the real estate and remodeling markets, the sheer number of Millennials equates to a substantial segment of potential clients. Whether you’re a home builder or a remodeler, knowing how to attract and retain this population is critical.
This particular generation is the first to grow up with the Internet. As a result, they do their homework online and will be well armed with information. Having a well-executed online presence is a must to engage this group. Online customer feedback is an important resource in their decision making process. They also demand excellent communication and expect to be constantly notified and kept in the loop, with text and email being the preferred methods of communication.
What do Millennials look for in a place to call home? Unlike other generations, most Millennials aren’t looking for a home where they will spend the rest of their lives. Most are looking at home ownership as an investment. They want to buy a house where they can live for a few years, make upgrades and improvements, and sell it for a profit. Because of the credit issues related to the recession and heavy student debt, as well as the fact that this generation is postponing marriage and starting families, many Millennials are looking for small homes that fit their budgets and lifestyles that make efficient use of space.
Features that Millennials look for in a home, whether buying, building, or remodeling, include:
- Open spaces – Millennials want fewer walls and partitions to create open spaces, such as a kitchen that opens into the family room. Most no longer want a formal living room or dining room.
- Multifunctional spaces – Because Millennials are opting for smaller homes, the space they have needs to be able to serve multiple purposes. Many Millennials work remotely from home and their living room may need to serve as both a home office as well as a space for socializing or relaxing.
- Minimal maintenance – Millennials want to live in their homes, not spend all of their free time maintaining them. They want materials that require minimal care, such as faux wood or tile floors that provide the look of wood without the maintenance. This extends to outdoor areas as well, where terraces, patios, and decks where they can relax or entertain are preferred to expansive lawns that require extensive landscaping and mowing.
- Technology – Millennials spend a significant portion of their time on wireless devices, such as tablets, laptops, and smart phones. Many also use their home as their office and need effortless access to their technology, making ample outlets and charging stations a must. Many also want their home to feature advanced technological capabilities such as home automation systems that will allow them to program everything from lighting to heating and cooling from their tablet or phone.
- Energy efficiency – Millennials are willing to pay slightly more for a home with high energy efficiency.
- Updated kitchens – Even among Millennials, kitchens top the list of remodeling projects. They want upgraded appliances, lots of storage space and work space, and an open design. They don’t want laminated countertops.