January 24, 2014
Sound bites from Preparing for the Millennial Buyer
Travis Robertson – Inman Connect, NYC, January 14-17, 2014
There are two major disruptive forces changing the real estate industry: 1. The accelerated technology revolution, and 2. The millennial revolution.
Born between 1977 and 1995, there are 84,000,000 millennials, outnumbering the 77,000,000 baby boomers. Gen X, the generation between, only comprised 40,000,000. As the boomer generation begins to shrink, the wealth has to go somewhere, and the millennials are going to be the beneficiaries. 35% of all real estate transactions in 2013 involved a millennial. According to estimates by the National Association of Realtors, boomers have 1.5 transactions left in their lifetime, while millennials have 6-8.
Here are some characteristics and trends of the millennials:
- Work/life balance. Why? Look at their driven parents. Over 50% of millennials come from divorced families. Why is there such a high divorce rate with boomers? Every generation has problems, but the huge houses of the boomers allowed separation and fostered lack of communication.
- Collaborative. No winners, no losers as they were growing up. They never competed against, always worked with. They don’t make decisions in a vacuum. Parents, friends, colleagues all become part of the decision making process. 67% want to live close to friends. 65% want to live close to family. On average, they live 10 miles from where they grew up.
- Multicultural. Where their parents were part of white flight from the cities, the inner-city failure resulted in forced busing and diversity training. They engaged with other cultures. The suburbs are still homogenous and lack the energy they seek.
- Eco sensitive. The environmental impact is very important or important to 57%. Walkability is important. They’re pushing back toward the urban centers. The baby boomers are also looking toward the cities. The two largest generations are now vying for the same properties. The boomers have the money. Builders are looking to retrofit the suburbs with urbanized centers.