How Millennials Are Changing Home Buying (and What Contractors Need to Know to Keep Up)

As millennials become home owners, it’s no longer business as usual; as with pretty much everything they touch, it’s a whole new way of doing business. Just in case you might be tempted to dismiss their economic impact, consider this: millennials recently surpassed baby boomers as the nation’s largest living generation. That means the process of home buying as well as home remodeling is about to get a lot more interesting.

Factors like high unemployment and student loan debts caused millennials to reevaluate their outlook on home ownership and long-term investment. Though slower to join the ranks of homeowners than previous generations, millennials are now spurring the demand for first-time home ownership. As the economy continues to recover, that demand will only gain strength.

Millennials are joining the ranks of homeowners, significantly affecting the home buying industry and trends.

Homes in need of TLC appeal to DIY-minded millennials

But what kinds of properties are millennials buying? More often than not the answer is starter homes, particularly those requiring updates and renovations. Considered extremely DIY-minded, millennials are taking advantage of the seemingly endless resources at their fingertips. From bathroom tile to deck building and everything in between, customization is the name of the game. Of course this is also a generation that appreciates expertise and the quality that accompanies it, but more than ever this generation is of the mind that buying a home is about function and less about gaining a shiny, new possession.

Customization is a key priority when it comes to millennial purchases in the home buying/remodeling arena and otherwise. Shown here: Fiberon Symmetry Composite Decking in Cinnabar.

Homeowner spending on remodeling is projected to rise exponentially through 2025, and the cause for this growth is based largely on the habits of millennials, according to a recent report by the Joint Center for Housing Studies for Harvard University (JCHS), Demographic Change and the Remodeling Outlook.

Energy efficiency and other niches becoming increasingly important to millennials during remodeling

And it’s not just the buying process that’s being affected by these market shifts. Contractors are seeing changes during the remodel process caused by this new generation of homeowners and their differing priorities. Specialty niches like energy efficiency and environmental sustainability are becoming increasingly important, as is home automation for everything from appliance control to security.

So what do these shifts in demographics and buyer behaviors mean for realtors and contractors? If you’ve been in the real estate or building industry for a while, you almost certainly have some tried-and-true tactics that have seen you through, despite the warming and cooling of certain trends. No matter your perspective, it may be a good time to take a step back and reassess practices to ensure that you’re keeping up with this new wave of customers.

As an industry professional, keeping an open mind can be imperative in meeting customer expectations and maintaining positive customer relations

Best practices for selling to millennials

Step up your social media game
Millennials use social media platforms like Twitter and Facebook as primary tools for communicating with other people, engaging with businesses, and performing research that ultimately helps them make purchasing decisions. Engaging content – primarily visual – is king, making sites like Pinterest, Snapchat and Instagram game changers when it comes to the opportunity to connect and engage with buyers in channels where they already feel comfortable and spend most of their time.

Along the same lines as social media is the importance of virtual tools in general. Millennials are typically not the pen and pencil type, so offering virtual design tools is a great way to set yourself above the competition. Starting the process with samples or a product visualizer can greatly help a client realize his or her vision, while virtual design software (like our deck design tool) can help him or her stay engaged throughout the process. Digital tools make the process three-dimensional and more collaborative for a population that truly values interactive resources.

It’s all about the experience
Millennials are completely redefining ownership culture and putting more of an emphasis on experiences. Keeping up with the Jones’ is just not as much of a priority for this generation as it was for previous generations. In terms of home buying, this equates to millennials being much less interested in finding the perfect house and much more interested in finding the right community that will align with and support their interests, passions, and needs. This includes supporting local businesses, public and shared transportation, an eclectic food scene, and vibrant cultural experiences.

Becoming a homeowner isn’t just about a house anymore. Increasingly, home buyers are seeking an enriching community that offers experiences and convenience.

Successfully selling to millennial clients requires an emphasis on selling the neighborhood in addition to the house itself, including painting a vivid picture of what their community would actually look like.

Be open to communicating in a number of ways, including text messaging
To effectively connect with and sell to millennials, you have to be willing to communicate with them using whichever method they prefer. For most millennials this means text messaging or instant messaging rather than talking on the phone or even meeting in person.

Do your research
Smartphones have made virtually everything mobile, including information. When researching homes or contractors, millennials will likely have their own background information and will have already researched other comparable options. It’s important to be ready and willing to interpret that information as an expert in your field.

Though it’s crucial to freshen up selling techniques, it’s not necessary to reinvent the wheel. Striking a balance between tried and true best practices and innovative techniques is really all there is to it. At the end of the day, being able to roll with the punches and stay up-to-date with trends can mean the difference between a successful sale or remodel and being passed over in favor of a more relevant expert.


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