The elusive Millennial market
We’ve been talking about them for years, it seems. But the Millennial home buyer remains the great wild card when it comes to emerging markets. What will the remainder of 2018 bring--a spike in homeownership, or the continued drive toward bigger and better rental options? There’s no doubt that Millennials have become the biggest segment of the homebuying market. But are we leaving money on the table when it comes to fully engaging them?
A few factors will impact this, of course. First and foremost (if we presume that the employment numbers remain consistent) will be availability. Inventory is starting to drop in many markets, especially when talking about homes most appropriate in size and price (“starter homes”) for first-time homebuyers.
Another factor to consider is appeal. Not just curbside appeal, but the appeal of renting versus owning. Consider that new apartments are increasingly being designed specifically for this generation: high-tech; community-focused. Combine that with the simplicity of renting, and one can see why debt-averse Millennials continue to rent. Now consider the mortgage process, which, admittedly, is improving, but isn’t nearly as straightforward as renting. While mortgage marketing is finally starting to “get” the Millennial mindset, the process is still far too painful. Lenders and settlement companies will play an important role enticing Millennials by continuing and even accelerating the digital mortgage push.
One final thing to consider about Millennials is brand loyalty. If we’re going to stereotype an entire generation (which we are!), we have to rank Millennials as among the most loyal to their brands...as long as the brands do right by them, and by the world around them. That means that the incentive of repeat and referral business looms large for REALTORs and L.O.s alike when doing business with Millennials. However, that loyalty must be earned. A digital experience would be a great start in that direction. Corporate reputation--how the lender, title company or brokerage interacts with the community; how it treats people--is another selling point. And how the Millennial is treated throughout the process (digital or not) will play a huge role as well. This is not a generation that shrugs off inaction, error or delay with “that’s the way it is.” As a result, whether an escrow officer or L.O.’s assistant, our industry will need to take pains to improve the borrower’s experience in an effort to win the running battle with the new generation of rental communities.