If there is one group of people the housing market has not figured out, its millennials. This is not just a “feeling,” this lack of understanding is found in the media. Take two recent articles from NBC News and Forbes. Although published less than two months apart, one would think that they were reading two contrasting articles, about two different generations of people, in two separate times.
In a June 2017 NBC News article titled, “Who’s Powering the Housing Market? Surprise! It’s Millennials,” Herb Weisbaum makes the case that contrary to popular belief, millennials are just as interested in owning a home as anyone else. He even quotes a study saying that millennials now make-up the largest group of people looking to buy a house (34 percent) (Weisbaum, 2017).
Fast-forward two months, and one may read a strikingly different story in Forbes. In an article by Annabel Acton titled, “10 Things You Need To Know About Marketing To Millennials,” a far more grim picture is painted about millennials and their relationship to home ownership. The article states, “Millennials are in a financial bind. They’re in debt (in 2016, the average college student graduates with $37.2k in debt), they can’t afford houses and are staring down the barrel of some pretty epic changes to the workplace, namely automation. Saving for a big house doesn’t make sense. Spending $800 on a primo festival experience does” (Acton, 2017).
This week, I also saw an article floating around Facebook called, “Millennials Are Buying Homes Because of Their Dogs – Not Their Children or Marriages” (Lewis, 2017). However, further examining the relationship between children and millennials can make this already complicated matter even more so…
One could sit here and argue who is right and who is wrong. Quite frankly, both are probably right to an extent. Millennials can easily make up the largest group of people looking to buy a home, but can also be largest group looking to rent and/or is plagued by debt. That argument aside, what seems to be more interesting is the fact that an entire industry (real estate) has neglected to understand and appeal to a generation that is a point in life where home-ownership is a serious consideration. Not only that, there also seems to be a lack of desire within the real estate industry to market to millennials.
In the NBC article, a Keller Williams agent in the Seattle-area states, “They can use the technology to find what’s on the market, so our role tends to be different for them. They understand the role of a real estate agent, as far as negotiations, contracts and paperwork, but they don’t necessarily need us to find the homes. Our role is to facilitate the sale” (Weisbaum, 2017).
Granted, the real estate industry has different challenges and considerations than a more traditional corporation, especially when one takes into consideration the shift from an “owning” economy to a “sharing” economy, and the rate of affordability based on location. Nevertheless, if a marketing pitch included the phrase, “They can use technology to seek us out,” I doubt that would go over well in the conference room.
The only thing that can be argued is that if the real estate market does not take time to get to know and understand the largest group of homebuyers, they are clearly missing an opportunity to sustain its industry in the long run. Moreover, the question remains, is there an untapped market here?
Acton, A. (2017, August 02). 10 Things You Need To Know About Marketing To Millennials. Retrieved August 04, 2017, from https://www.forbes.com/sites/annabelacton/2017/08/02/10-things-you-need-to-know-about-marketing-to-millennials/#1c87fccf2e6c
Lewis, R. (2017, July 27). Millennials Are Buying Homes Because of Their Dogs | Money. Retrieved August 04, 2017, from http://time.com/money/4876151/millenials-homes-dogs-children-marriages/
Weisbaum, H. (2017, June 05). Who’s Powering the Housing Market? Surprise! It’s Millennials. Retrieved August 04, 2017, from http://www.nbcnews.com/business/real-estate/who-s-powering-housing-market-surprise-it-s-millennials-n768196