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Have Millennials Met Their Match? Why Boomers are Winning in Home Buying
For the past few years, the Millennial generation has made up a significant portion of new home buyers. Successful real estate agents have adopted new ways of attracting and retaining millennials as this new generation continues to mature into home buyers. Recently, however, Millennials are seeing a push back in their once dominated housing market. Boomers are now giving Millennials a run for their money when it comes to buying a home, literally.
According to a recent report by Zillow, young people are making up a smaller share of recent homebuyers than in previous years, most likely because of the increased market activity of baby boomers. So, what is a Baby Boomer?
“Baby Boomer” is a term used to describe a person who was born between 1946 and 1964. According to 2019 statistics, this generation represents about 23.5% of the population of the United States. Right now, many Boomers are around 60 years old and have been longtime homeowners that are now looking for a change. And with the “booming” housing market, (pun intended), this generation of home buyers are making moves and outshining their competition. Here’s why:
Now’s the time for Boomers to buy
Picture this, you’re heading into your 60s, your kids have moved out and your home is just too big for the next chapter in your life. With the pandemic pressures and the changing housing market, you decide now’s the time to downsize—or even fast-track your retirement plans. This is a very common occurrence right now in the boomer generation. The natural progression of life, and the upcoming retirement years, is a catalyst for changing homes. And with the post-COVID housing market still hot, boomers are coming into home-buying at the perfect time to utilize their advantages.
The home equity advantage
According to HousingToday, in the past two years home prices have gone up nearly 22%. This means homes are being sold above listing price, and there’s no end in sight. In fact, Goldman Sachs predicts home prices will rise another 16% in 2022! These huge increases in the price of homes means big equity gains for current homeowners. Equity gains are a big advantage in the boomer generation right now. Most of them have owned a home for a long time, which means they can tap into equity gains. This can be beneficial in making cash bids—which according to recent statistics is a huge advantage in winning a bidding war.
“Whether downsizing or moving to a new town, Boomers being more active means competition that previous generations did not have when buying their first home,” Jeff Tucker, a senior economist at Zillow said. “And older buyers have the advantage of a lifetime’s worth of savings and home equity to leverage in a competitive offer.”
The Millennial disadvantage
Millennials are still making up a large part of the homebuying market, and this was accelerated after the pandemic. However, there are some disadvantages Millennials are facing while trying to buy right now. According to recent report, over half of non-homeowning millennials (60%) report that student debt is making it harder for them to purchase a home. There’s also the supply and demand issue. New homes are finally seeing an increase, but just a few short years ago, new home construction was much slower. And now, post-pandemic, the changes in the housing market demand have also resulted in builder supply and labor shortages. Not to mention the cash-bidding wars, and very high competition right now. All of these factors can make a big impact on a millennial’s ability to purchase a home for the first time.
The ever-evolving home buyer
It’s safe to say, each year brings new changes and trends to the housing market. And with the boomer generation fast-tracking their “next chapter,” Millennials are feeling the competition. As a real estate professional, it’s important you’re aware of these new trends in the market, and also able to strategically market to those that are looking to buy and sell right now. Remember these character traits most seen in the boomer market when creating your marketing strategy:
- Boomers are nostalgic. They appreciate the slower days of their youth, and want to incorporate the idea of family and slowing down into their next chapters
- Boomers are more tech-savvy then you would think. Though they may not have grown up with cell phones and computers, they have adapted and many are very well-versed in the current tech trends.
- Boomers have more wiggle room when it comes to their finances. They have saved up, are on the verge of retirement, and are most likely ready to find their final home that meets their aging needs.
- Boomers love community—especially with retirement on the horizon. Cater to their ideas for slower-pace, friendships, family and being able to find a good fit to meet their long-term needs.
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