Real estate brokers and experts outline what the buyer should know before purchasing a property at an auction house…
How Millennials Are Reshaping The Luxury Home Market
Millennials are well-known for their ability to alter the status quo and usher in change. In the job market, they’ve demanded, and increasingly obtained, the option to work remotely from home or a nearby coffee shop and enjoy more flexible hours.
Rather than settling in the suburbs, many of them have chosen to live in city environments. A study exploring national happiness levels found that, unlike previous generations, a significant portion of millennials love living in urban centers.
And when it comes to buying a home, this generation is also redefining what homeownership and luxury mean to them — and what they’re willing to pay for.
Many millennials chose to rent while they were in their 20s instead of investing in starter homes. Now in their 30s, they can afford higher-priced options.
In fact, Toll Brothers, the largest luxury homebuilder in the U.S., reported that almost a quarter of its homes were purchased by buyers under the age of 35 in 2017. And the demand for Toll Brothers’ high-end homes isn’t slowing down — it saw a 7.1 percent increase in year-over-year sales during the third quarter of 2018.
Because millennials comprise a significant percentage of high-end homebuyers, real estate agents need to be aware of the selling points that appeal to them — and how to market to them effectively.
Here are a few of the luxury home features millennial homebuyers desire:
1. Smaller footprints…
Millennials are forgoing larger houses with a lot of square footage in favor of smaller luxury homes that make smart use of space and are filled with high-end amenities and furnishings.
Some of the most in-demand features include open concept living areas with plush living rooms and showcase kitchens, spa-like bathrooms and multiuse rooms.
Millennials desire functional layouts for entertaining and the flexibility to alter spaces to fit their needs, such as a yoga studio that can also be easily converted into a bedroom for overnight guests. Their preferred lifestyle and personal interests inform what they most want in a home.
2. Smart homes…
Constant connectedness, both personally and professionally, has become the norm for millennials. Fast internet access for telecommuters who work from home is a must. Another characteristic of millennial daily life? Embracing the Internet of Things (IoT) to create a smart home filled with connected devices.
This can include items like smart appliances, smart speakers, networked whole-house audio systems, smart thermostats to automatically adjust the temperature, voice-controlled lighting and monitoring systems so homeowners can keep an eye on their dwelling (and Fido) whenever they’re away.
If you’re selling a home with smart features, make sure potential buyers are aware of all its bells and whistles. If possible, have the homeowner set up an iPad with instructions so visiting guests can experience hands-on demonstrations.
3. Green, energy efficient homes…
Millennials care about preserving the environment — and simultaneously saving money doesn’t hurt, either.
Energy efficient and green homes are very desirable to this generation of homebuyers. These earth-friendly features can include items like solar power, indoor air purification systems, geothermal energy systems and tankless water heaters.
Because these types of apparatus are usually hidden behind walls or other barriers, they can be easy to overlook during a home tour. Highlight any green or energy efficient assets in your marketing materials, and be sure to do the same thing in the house itself.
Print flyers or cards outlining green or energy efficient features and position them where potential homebuyers will see them, like on a central table or even temporarily mounted on walls. Don’t forget to point out and educate prospective buyers on the tax benefits and return on investment of these features.
4. Location and walkability…
As millennials flock to urban areas, walkability and proximity to public transportation are highly sought-after attributes. Many millennials are interested in living in neighborhoods where they can mingle with like-minded individuals and have the option to stroll (often with their families or dogs) to local amenities.
For longer treks, they may also prefer to commute via public transportation or use ride-share services. Some millennials are eschewing car ownership completely in favor of using these modes of travel. Being able to navigate an area by foot or via public transportation is also desirable for out-of-town guests — or renters.
If a millennial buyer is considering the possibility of renting out their home or listing it on Airbnb to help finance their mortgage or generate extra income, walkability and convenient transportation options will help boost its popularity.
As a recent post from Business Insider notes, it’s also possible you’ll encounter urban-based millennials who don’t want to buy a primary residence in the city; instead they’re choosing to rent there and purchase a vacation home elsewhere.
No matter whether a luxury home is located in an urban center or a vacation hotspot, real estate agents should always be aware of the importance of walkability and easy access to transportation when it comes to millennial buyers.
5. Indoor/outdoor living spaces for wellness and entertaining…
Millennials want the option to stretch their living areas beyond the walls of their homes to include outdoor spaces. This is particularly true for those who live in cities, where green space is at a premium.
Balconies, decks or rooftop gardens are all excellent spots to take advantage of fresh air and offer additional places for entertaining, relaxing and practicing mindfulness.
High-end condo developers have started adding lush outdoor amenities meant to encourage wellness. Examples include an outdoor yoga deck in L.A., an adult treehouse in New York City and a tranquility garden complete with lemon trees in Florida.
If you are staging a high-end home or luxury condo for sale, ensure that outdoor living spaces look just as inviting as the indoor areas. String up party lights and group outdoor furniture and tables on an all-weather rug to ensure potential buyers can envision the space as a seamless extension of the home.
There is no doubt that millennials are having a profound effect on the world of luxury real estate. As they continue to purchase high-end homes, savvy real estate agents who take note of their unique buying behaviors and lifestyle preferences will be well-positioned to support them in their homebuying endeavors.
Agents who are able to become trusted collaborators will reap the benefits of assisting this increasingly affluent demographic, both now and in the future.