There is a stereotype that millennials are slackers who live in their parents’ basements until they inherit the family home, but new research by Sotheby’s has found that they are, in fact, purchasing homes. And expensive ones at that.
Millennials are adults born between 1981 and 1996, and currently represent the largest share of homebuyers in the US, according to a survey by the National Association of Realtors. The US market currently consists of 38% of millennial buyers.
“They’re just as interested in owning a home. They just waited longer to buy their first one,” said Bradley Nelson, chief marketing officer of Sotheby’s International Realty, as reported by Bloomberg.
While previous generations embraced the notion of a “starter home”, wealthy millennials are going big or going home.
“In the past, people bought a modest property, lived in it until starting a family, and then traded up to a larger property,” he added. “Millennials are finally coming out of the gate, and it’s not uncommon for the first purchase as a first time homebuyer to be a multimillion-dollar luxury home in the US or internationally.”
Baby boomers are retiring to sunnier locales, while remote work has allowed millennials to ascend the housing ladder in smaller, more affordable cities, stipulated a new report from Sotheby’s.
An emphasis on things like sustainability will certainly go into overdrive with the ageing of millennials, who, at 72.1 million, are the largest adult generation, with unique consumer preferences that will profoundly influence the direction of the luxury housing market,” the report read.
Millennials are also the most educated generation, and typically have higher earnings and will inherit more than any prior generation. Their preferences in housing and amenities are also predicted to permanently shape the housing market.
“It’s the difference of choosing where you want to live vs. living where you work,” Nelson said. “Millennials are thinking about their overall lifestyle. It’s propelled these second-tier markets into the top of the interest list.”
Developers are likely to begin integrating touches, high-tech features into modern homes. Features such as solar panels and green roofs seem to be a preference among millennial buyers, as they like homes that are move-in ready and environmentally-conscious.
According to a December Sotheby’s International Realty survey, 63% of affiliates polled said they expected luxury home prices to rise over the next three years in their respective markets. More than 70% of respondents reported heightened demand at the end of 2020.
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