Did you know that there are approximately 80 million young folks in this country making up the largest demographic group since the baby boomers? Millenials or generation Y, ages 18-35 make up the next generation of first time home buyers. Statistics show that up to 35% of these young people are still living with parents and only 26% are married. That means that potentially we will see a surge in home sales as these folks move out of the nest and begin to start their families. First time buyers are always the key to a successful home selling market and we are experiencing the entrance of many new potential homeowners.
Real estate, as in any other commodity is governed by the law of supply and demand. When supply is up and demand is down prices fall. The reciprocal follows that when supply is down and demand is up, prices rise. The latter is what we are experiencing in today’s real estate market. Home prices are rising (depending on the community) due to high demand and low inventory for single family housing. This is a great opportunity for those of you who have waited out the recession to recoup much of your equity. In many areas we are back to the peak prices of 2007!
There is one caveat when preparing your home for today’s market. Keep the millennials in mind at all times when deciding how to present your home! That is critical as your goal is to attract the best price depending on the condition and location of your home. That means gaining insights as to the buying habits and expectations of this huge cohort, the millennials.
As you probably know from observation, they are “digital natives”, meaning this is the only generation who has not had to adapt to technology as they have grown up with computers and social media. 80% are on Facebook and most share too much information about themselves online as viewed by older generations. They have high levels of student debt and lower levels of personal wealth and income than their two predecessor generations (Gen Xers and Boomers) at the same stage in their life. Lifestyle is the most important factor when considering buying their first home and they dislike being pressured by aggressive sales people. They will pay a much higher price for a home that is move-in ready and penalize a property that is in poor condition.
What does all of this mean to you the homeowner? Everything! Since this group has a huge influence on home sales across the country, you want to make sure that you keep those characteristics listed in the previous paragraph in mind when preparing your home for sale. Even if you are not ready to sell today, understand the value of millennial friendly upgrades for that moment in time when you are ready to transition to new housing. For instance this group will pay much more for cosmetic upgrades such as granite counter tops, re-finished hardwood flooring, new carpeting and specific paint colors known by most Realtors and stagers. They shop online, meaning the pictures they see will greatly influence them in their search. Therefore vacant homes show poorly in pictures verses a property with furniture. Starting with your exterior, I would suggest replacing a bad roof and painting where needed on the outside so that they will want to come inside. A poor outside appearance can prevent a sale or cause today’s buyer to harshly penalize the value of your home. If you have a basement that is damp, stained or cracked, make sure you have a basement inspector or engineer inspect your walls and drainage system and make any necessary repairs before putting your home on the market. Nothing will kill a sale more than a defective basement!
There are so many considerations when deciding how to offer your home to the public. Should you fix up or sell as-is. What affect will the condition have on the final sales price? Only a seasoned Realtor can help make that determination for you. The experienced agent will do a walk through and look for signs of defects or improvements needed. They can identify areas of concern cosmetically as well as define the various options and sale prices reflecting the work or lack thereof done on your home. They will let you know the best time to list your home to maximize your return. All of this information in most cases is free and necessary. When the time is right and you prepare your home properly, your agent will then attract an offer on your home in a timely manner (2-3 weeks) and you can move on to enjoy your next home which better meets your physical and emotional needs.
The next time you see your kids and grandchildren; know that they will be changing the world for the better but doing so in a much different way than their predecessors. They will use technology to their benefit and adapt it to meet their needs in the future. Just as we thought we had a better way than our parents, they too will have that same sense of uniqueness. But in the end, homeownership will always be preferable to renting, and raising a family with safety and stability will always be desirable; no matter how they get to that end. So put your fears to rest and know that human nature does not change in a generation or several generations. It is just how they travel to their destinations seems a bit odd to the previous generation. That is how is always has been and will be!