They might do their research online and also believe that data and machine learning will have an important influence on the real estate experience, but when it comes to the process of searching for a home, millennials and baby boomers lean more on their agent than digital platforms. This, according to a survey on homebuyer behavior by Owners.com that studied that homebuying patterns of over 1,000 buyers across different age-groups.
The survey revealed that 82 percent of the buyers said that online access to data-focused property information was essential to their decision-making process. But that was the only aspect that all the three generations—baby boomers, Gen X, and millennials—agreed upon. The survey highlighted vast differences in the way these generations manage their homebuying budgets and work with real estate agents.
For instance, Gen Xers were the most hands-on when looking for a home. The survey found that they were likely to do their own research online to make decisions before initiating the next step with their agent. In fact, 62 percent of Gen Xers agreed to do their own research followed by 59 percent baby boomers and 48 percent millennials. Gen Xers also suffered from trust issues with their real estate agents with only 29 percent of this generation saying they trusted their agents to do the legwork, compared with 33 percent millennials and 36 percent of the baby boomer generation.
When it came to budgets, the survey found that millennials were more likely to stray from their budget while buying a home. Forty percent millennials said they went over budget by an average of $24,545 while buying a home; 34 percent of the Gen Xers also went over budget paying around $13,996 more than the price they had in mind while buying a home. Baby boomers were sticklers when it came to the budget of their new home with only 19 percent going over budget and that too by $8,024 on average.
The real surprise came when the three generations were asked about their go-to resource when searching for a home. Gen Xers leaned more towards online data and platforms to facilitate their search with 50 percent of this generation using these platforms, whereas 41 percent baby boomers and 38 percent millennials used online data and platforms for their search.
While Millennials were more likely to rely on their family and friends as a resource, they also relied on their agent the most during their home search. The survey found that 54 percent of baby boomers and 47 percent of millennials relied on their agent the most during their home search compared to only 42 percent Gen Xers who said they relied on their agent.
According to a Realtor.com study, Millennials are largely flocking to tech hubs and places with lots of culture – cities where they can “make good money and still have a good time.” Top spots for Millennials include San Francisco, Seattle, Houston, Dallas and Washington, D.C. And though the median cost of a San Francisco home is $846K, they don’t seem deterred by the prices.
According to Jason Dorsey of the Center for Generational Kinetics, Millennials are prioritizing lifestyle and amenities over costs and practicality. “Millennials are saying, ‘We are willing to move for lifestyle and job,’ as opposed to, ‘I need to stay close to home because it’s safer and lower cost,’ as previous generations may have,” Dorsey said. “If communities position themselves correctly, and have the type of lifestyle they want, they absolutely can be a top choice for the future.”
Generation X buyers are still reeling from the Great Recession and are focused on finding a great deal. They want areas where they can make big incomes and buy equally big houses – without going broke doing so. Five of the top 10 spots for Gen Xers are in Texas, including Houston, Dallas, Austin, Odessa and San Antonio. Other Southern cities like Miami, Atlanta, and Charlotte, North Carolina are also big amongst Generation X buyers.
Baby Boomers – mostly retired, empty nesters by this point – are looking more toward the Sun Belt – warm spots where they can live amongst their own. In fact, six of the 10 hottest Boomer markets are in Florida. Still, Phoenix claimed the top spot for Baby Boomers. The city offers lots of golf courses, a wide array of older adult communities and fairly affordable housing prices.
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