According to PRNewswire and the PulteGroup, Millennials continue to show a strong interest in purchasing a home. For renters ages 18-34 with an income of more than $50,000, 65 percent indicated their intention to buy has significantly increased in the past year.
The catch? Most Millennials aren’t moving into their first home on their own. Ideally, 76 percent said they plan to live with a spouse or significant other, and if not coupled they anticipate having a roommate, which could mean a friend, parent, in-law, grandparent or sibling living with them.
Even after witnessing the housing boom and bust, Millennials still view a home as an investment. Their number one reason for buying or the desire to buy is to build equity; the second reason is being tired of apartment living.
What do Millennials Want in a Home?
Today’s buyers want a lot of value in a home and for it to make efficient use of every space. The single most important home feature to a Millennial buyer is the floor plan layout. In fact, an overwhelming 69 percent want an open/layout space in the kitchen and family rooms for entertaining family and friends.
According to PulteGroup’s internal buyer surveys, Millennials found the following aspects in a new home as extremely important/very important:
The Best Way to Reach Them
The Internet is the primary source of information for home shoppers today – more than 90 percent of plugged in Millennials research their home search online. They really do their homework and use several resources to make such an important decision.
PulteGroup uses a variety of ways to reach them, from mobile apps to chat rooms to visiting model homes and designing homes online. They have successfully provided a variety of ways for Millennials to get the information they want, when they want and any way they want.
How do you reach this valuable market? Share by commenting below!
Some new home amenities have transitioned over the years from being considered luxuries to being standard additions to today’s custom home designs. One of those amenities is a home elevator. Once thought to be an item exclusively talked about by Robin Leach, home elevators are actually becoming increasingly common for both contemporary and traditional homes.
Because of multiple levels, a home elevator would obviously allow everyone in the family access to the entire house, even after their mobility may be compromised.
What about the cost of a home elevator? When you consider that a home elevator becomes one of the most-often used elements of a new home, the investment is wise, as it will also increase the resale value of your home up to 10%. A home elevator can also help to avoid injury or damage when transporting objects from one floor to the next.
Another concern may be the space it takes to incorporate a lift or elevator into either an existing home or new home plans. Some companies have released a new option: customizable cab sizes and the ability to remotely locate its control box, eliminating the need for a machine room.
What do you think about home elevators becoming the new standard? Would it be worth the investment in your new home?
“Language forces us to perceive the world as man presents it to us.” ~Julia Penelope
Cost vs. Investment
When people hear the word “cost” they automatically associate it with loss, or money being wasted. An investment makes people feel they are certain to get a return. In both cases money is being spent; however cost feels like money that’s never coming back and investment feels like money that’s working for you.
Problem vs. Challenge
Never use the word problem with your prospects or sales team. It has such a negative connotation and is usually associated with pain. People will almost always choose the path of least resistance. A challenge simply seems like a bump in the road, or something that can be overcome with a little effort.
Contract vs. Agreement
Contracts sound like they are set in stone and can never be reversed. People in general do not like to have their freedom restricted. When choosing agreement, it is perceived that two parties weighed out the risks and benefits and have come to a decision that is in the best interest of both.
Expensive vs. Top of the Line
Expensive, like cost, can feel like money being wasted, or overpriced. Top of the line really helps someone feel like they are getting the best of what’s available and that they are worth it.
Cheap vs. Economical
I don’t know anyone that likes associating with the word cheap. Especially when it feels like the quality of a product or service is compromised – you get what you pay for. Economical empowers people, as they believe they made a smart decision or purchase.
What words really repel or engage you when making a purchase decision?
Second homes/vacation/pre-retirement homes are priced right. If you were even remotely thinking of buying, there will probably never be a better time. Prices are reduced, and many distressed deals are being purchased at .30 cents on the dollar.
Conversely, beware when purchasing distressed properties because you won’t know the future of the project. Is there an active HOA to manage finances and other issues? What happens if an investor buys the project? How would the future inventory be priced? Unfortunately, along with affordable pricing comes a lot of unknowns.
At Idea Associates, most second home purchases we are seeing for our clients are cash deals. Anywhere from downsizing to Intown Condos to planned retirement housing in second home neighborhoods – many are bought with cash. The price is lower so buyers can afford to pay with cash, especially since most can’t get financing anyway with banks’ new stringent policies.
With the future so unsure, most buyers don’t’ believe they are making money in investments for these second homes, so they are choosing to buy something they want for the future instead.
Have you personally considered taking advantage of the prices and buying a second home? If you’re a builder, developer or agent – what are the trends you are seeing?
A wise client of mine has said many times: the government had one good finance program. Congressional wisdom said, if we have one program working well, why not three? Right! So was born Fannie and Freddie.
Although the expansion has made home ownership easier and a profit for investment institutions, insurance companies, and developers/builders, it wasn’t 100% positive for America – thus the foreclosure rate and an economy that almost imploded a year ago. But we rode the tide; and it was great for a lot of people, including Idea Associates.
Regardless of the current state, I think that renting will be popular for many years due to these and other circumstances:
First-time buyers used to account for 40% of home sales. Now they’re down to 29% and falling, experts say, as first-time buyers confront a steady accumulation of rising fees, costs, and rates. Lenders are requiring larger down payments, and new proposals call for mortgages to become more expensive and limited in size.
This, of course, is in response to the devastating mortgage losses of the last several years. Banks and other lenders lost billions of dollars on subprime and other risky mortgages, and some must now buy back bad loans they sold to Fannie Mae and Freddie Mac.
The window of opportunity for first-time buyers may be closing. Home prices still seem to be near the bottom, mortgages are still cheap and interest rates are still low, but for those who don’t want to wait, here are some new rules for first-time home buyers.
More money down
As housing prices drop, mortgage lenders are requiring larger downpayments on homes.
It’s unlikely that a first-time home buyer can save so much money for a down payment, especially in high-priced markets and might need to consider alternative options to get cash. Buyers may have to be open to co-owning a home: signing up for a mortgage with a co-applicant who has extra cash to put down but wants a stake in the property.
Not only are the days of flip-and-move long gone, but buying a house has become truly a long-term investment. Experts predict very slow growth in home prices over the next 10 years, which means it will take a long time before sellers can make a profit.
For first-time buyers, this means sticking to a home that requires few major projects, which builds equity with the passing of time.
Over the past few months, investors, international buyers, and downsizing retirees have made a noticeable impact on the market, because they’re paying with cash.
To stand out, first-time buyers may have to present an offer with few contingencies; there’s little reason for a seller to work with someone who requests repairs or asks them to cover the closing costs.
How do you see these changes affecting the first-time homebuyer market?