Millennials/Retirees Search for that “Golden Unicorn” Home
Summer brought out new kinds of buyers… did you take note?
August traditionally demarcates the end of the summer season in real estate – it has usually been a quieter month – parents are busy buying last minute fall school supplies and trying to fit one last beach trip in at the shore before the Labor Day BBQ prep takes over for the last week. Buying or selling a home is the farthest thing from their minds, which usually sees agents tightening their belts in preparation for the lean times of the end of summer real estate season that lasts through Yom Kippur.
Did I say “usually?” Yes, we had the lull that surrounded the July 4th holiday, and wasn’t everyone clutching their pearls and gasping for air in panic? Our tri-state market area can be highly volatile, and we examine it through a very granular lens, trying hard not to read the tea leaves of mild fluctuation as portents of grave change. Whispers of “shift” were heard behind trembling hands…
However…to our surprise and delight, end of July brought with it both torrential rainstorms and a shy, cagey breed of “New Buyer” to our market, emerging from behind their zipcars, armed with zestimates and online preapprovals. Perhaps all is not lost?
This Buyer is interesting. Confusing. Terrifying.
They are of 2 primary age groups – millennial and retiree – the main factor being THEY ARE NOT CONSTRAINED BY THE NEEDS OF THEIR CHILDREN. My boomer generation clients were always intent on “only the best schools” for their family units and it wasn’t unusual to see them compromise on location or size in order to be in a top-rated school district.
But THIS Buyer is more concerned about other things, like first and foremost:
- Their commute to NYC or other places of work
- Walkability to a vibrant downtown area with ready access to shops, trendy restaurants, train station & sometimes parks/green space
- Turn-key homes that are move-in ready and are often willing to pay a premium for someone else’s renovations – this attitude has given a true boost to the flipper market, as evidenced by the slew of house renovation shows in television and online. Oddly enough, tip-top schools for many, are far less a focus. Or as one millennial client of mine, Kara, who recently bought in Bloomfield said, “It’s not that schools aren’t important to us, but our kids are pretty young and we want good schools for them, but they don’t have to be, like, the BEST…we just want a nice house and decent schools with an easy commute to New York City…”
That being said, affordability seems to be a huge factor as well for these new Buyers – they set budgets that they do NOT budge from, even willing to pass up the “perfect” house if the price isn’t right. They are able, with great fortitude and determination, to separate emotion from the business of home buying, and falling in love is not something they do. For the millennial Buyer, perhaps years of watching the Boomer/Gen X generations struggle with car payments and mortgage payments and crushing credit card debt and piles of student loan debt has instilled a real sense of not wanting to get in over their heads financially. As for the Retiree Buyer, a relatively fixed income, steady but slow house value recovery from the 2008 market crash, potentially continued adult children dependents and less than stellar retirement planning has forced them to evaluate their retirement purchases with great care & scrutiny, too.
Additionally, here is how these factors have affected how I do business with these Buyers:
- We look at more houses for longer and more times – no one is in a hurry and they are willing to wait (and spend YOUR time) to find just the right house. Setting early expectations is a huge part of minimizing this issue – my clients are asked to make a list of their top 5 must–have features of a house, then asked to axe the 2 “musts” they can learn to live without. It sets the stage for reasonable compromise well in advance. A buyer presentation where we review the list to sale price ratios and day on market numbers for towns of interest can start the wheels turning for looking for alternative options (location, style, features, size and even price) when the perfect “golden unicorn” isn’t within reach.
- We often write lower offers to start, as this Buyer feels the need to bargain and negotiate. During the buyer presentation, a review of local offer customs and terminology (best and final offers, 2 step offers, multiple offers, offer guidelines and deadlines, etc.) and early introduction of sweetening terms like appraisal floors and inspection waivers can help prepare them for writing the strongest offers possible.
- This Buyer likes to bring their own Attorney, Inspector & Mortgage Company to the deal – often out of area (based sometimes on YELP or ZILLOW reviews) and not always versed in local practice. Introducing my attorney, lender, title and inspection lists as part of our TEAM can often help Buyers be comfortable with working with our vendors.
- Transactions can be harder to keep together – these new Buyers can be more skittish and are willing to walk away if the inspection isn’t great (hard to come by with our 100+ year old housing inventory). Pointing out potential inspection related issues during showings and careful review of seller disclosure paperwork helps lay the foundation of comfort with an older home.
- Communication can sometimes be sub-optimal as this new Buyer is less inclined to spend time talking outside of texting, emailing, Facebook messengering, WeChatting, Lining, etc. This is on us – get proficient with technology – it will serve you as the market continuously evolves and grows.
What’s the takeaway for us, the Real Estate Professionals who want to help them?
This new breed of buyer is here to stay and working with them will stretch the limits of your skills as Real Estate Professionals, as well as your patience and your current technical capabilities. Roll with the punches, listen to your clients’ needs and learn to reflect their concerns and avenues of communication. Setting expectations, early education and vetting will go a long way in earning mutual trust between you and this new Buyer – heck, it may even be rewarding.