Millennials have become more positive when it comes to taking the plunge into homeownership. In fact, many millennials are primed to gain market share in the second half of the year, based on the results of a REALTOR® consumer behavior survey of more than 12,000 respondents conducted from Jan. 1 - June 15, 2015.
"Despite the slow indicators we saw earlier this year, 2015 is on pace to be one of the best years for housing since 2006 due to strong sales and higher than predicted home prices," said Jonathan Smoke, chief economist for realtor.com. "Additionally, we're observing an uptick in millennial traffic and sentiment that we expect will result in more first-time home buyer sales in the later part of the year."
Smoke said historically, millennials make up the largest demographic of home buyers and can have a dramatic impact on housing. Since the beginning of the year, the REALTOR® website has observed a slight increase in older millennials – between the ages of 25 and 34 years old – visiting its website and mobile applications with the goal of buying a home. In the first half of June, the share of traffic represented by older millennials looking for a home to purchase increased to 23 percent, as compared to 21 percent in January.
In mid-June, 65 percent of 25-34 year olds responding to the survey indicated they intend to buy a home within three months, up from 54 percent in January. Additionally, older millennials and first-time buyers are very optimistic about buying. Both groups are slightly more likely than the average buyer to say that they are "very likely to purchase within the next 12 months."
Smoke said according to data the National Association of REALTORS®, last year the first-time buyer market share dropped all the way to 27 percent in the summer. "This year, we're seeing an increase in millennial demand that points to a strengthening first-time buyer demographic. As the economy continues to grow over the next few years, we can expect first-timers to return to a healthy level of 40 percent of the market. A return to that level would add approximately 15 percent to the number of total homes sold," said Smoke.
How can REALTORS® best serve the millennial generation? At a recent district meeting of the Silicon Valley Association of REALTORS®, social media evangelist Tim Hmelar told REALTORS® millennials are tech savvy. This generation switches its attention between media platforms like laptops, smartphones, tables, and television 27 times per hour on average. According to a joint study by Google and the National Association of REALTORS®, 89 percent of new home shoppers use a mobile search engine at the start and throughout their search.
Internet shoppers demand fast response, especially the millennial generation. Hmelar said once contacted by an Internet prospect, REALTORS® have 23 minutes to respond.
"They want information now. They don't want to wait till tomorrow," said Hmelar.
The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.
The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.
Variations of this article have appeared in local area newspapers.
For further information, please email or call the SILVAR office at (408) 200-0100.