Last Updated on April 21, 2023 by Luke Feldbrugge
There are definitely some things to understand about working with Millennials. Real estate agents are typically of two minds about the Millennial generation. On the one hand, they are the largest generational group of first-time home buyers (about 81 million of them). On the other hand, they have been postponing big purchases, like homes, longer than any other generation due to heavy student debt and other factors. And it didn’t help to have the Great Recession housing collapse right as they were coming of age as home buyers. Is there a way to break through to this demographic?
There are two things that will help you when working with Millennials: timing and message. Timing means right now.
“Millennials make up the largest portion of the population that are purchasing properties, with 43% buying new homes. That number is up from 37% in 2021, the National Association of Realtors found. Millennials also represent roughly one-fifth of the population in America and are the fastest-growing demographic in terms of homebuyers.” –Mortgage Professional America
The “wait and see if they can afford a home” mentality seems to be fading among Millennial home buyers, and almost half of Millennials are ready. And in terms of numbers, the Millennial generation is larger than the Baby Boomers. That all spells opportunity for real estate professionals to be working with Millennials to purchase a new home.
What about message? When working with Millennials, nailing down a marketing strategy that will resonate with Millennial homebuyers is easier than you might think. It starts with understanding the seven core characteristics of Millennials as outlined by Neil Howe and Bill Strauss in their book Millennials Rising: The Next Great Generation. (BTW, Howe and Strauss coined the term Millennial).
The 7 Core Characteristics of Millennials
If you are not clear on what Millennials are, they are the generation that was born between 1980 and 2000. You will see a lot of different numbers when it comes to defining each generation, but that’s close enough. Currently Millennials are about 23 to 45 years old.
As you go through these core characteristics, it’s important to remember these are generalizations about a large demographic of young people. Consequently, your Millennial son or daughter may not have all of these characteristics, but as a group, these young people demonstrate certain attitudes and motivations. Also, these generalizations are supported by research studies from a wide range of organizations over a long period of time. This isn’t just anecdotal.
In addition, we’re sure you’ve seen a lot about high-tech gadgets and use of technology to reach them. We are going to go a little deeper than examining online resources and social media accounts. We want to uncover for you, unique tips that will open the door to more personal interactions when working with Millennials.
This generation was the first to see participation trophies because they played on the soccer team. Their Baby Boomer parents focused a lot of attention on these kids as they grew up. Most parents of Millennials became kid delivery professionals, getting them to practice, dance class, band, school and back home again.
Millennials don’t like to be treated special, they expect it. They have a strong sense that they have a generational destiny to make a difference and fix a lot of what’s wrong with the world (remember Bob the Builder?). This sense that they will in their careers, their life, their choices and even in what homes they choose. That means sustainable houses, energy efficient homes and even homes that use alternative sources of electricity will rate high with these young buyers. They don’t have a passive relationship with the future. They plan to work to change things, and they emphasize practical action over just talking about it.
Remember the signs on the back windshields of care “Baby on Board.” That was the prevailing thinking about this generation as they were born. The emphasis on keeping this special generation safe cannot be stressed enough. They grew up in an era of increasingly complex child safety seats, baby monitors, helmets for every sport and Amber Alerts. Keeping young people safe became part of the national agenda.
In the early 70’s, Lee Iococca said “safety doesn’t sell,” in response to Ford Pintos that were exploding during crashes. With this generation, the pendulum has swung in the direction of safety, and there are now more safety features on our cars than we can count.
Millennials expect us, the older generations, to keep them safe. In terms of real estate, that means emphasizing the safety features of a house. It also means keeping them safe from predatory lending in terms of mortgages. They all remember the housing bubble and subsequent crash in 2007-2009. Many of them also have student loan debt responsibilities that are unforgiving and overwhelming. They can be forgiven if young adults have a very cynical attitude toward private lenders.
Being told they were special and seeing our efforts to keep them safe has made this generation very confident in the future (in particular, their future). In spite of the Great Recession and punitive student loans, they have remained optimistic. When compared to the previous two generations, Boomers and Gen X, the younger generation is substantially more positive about the future.
In terms of real estate, these young professionals’ confidence in their future should be good news. It’s easier to work with people who are confident than those who are pessimistic. Showing them how the new home will fit into their bright future should be an easy story to tell. This is the first generation, since the 1940s, that believes they will have a more prosperous future than their parents. If you are accustomed to selling to skeptical Boomers and Gen X buyers, Millennials will be a breath of fresh air.
From a very young age, Millennials have been grouped into teams at school, and they came to see that accomplishing work is best done in teams. Add to that the many sports that this generation participated in, it’s no wonder that teamwork is natural to them. Consequently, they put a high value on the success of the team, even over individual accomplishment at times. This is a very different approach to life from the previous two generations.
This has given them a strong sense of fairness, not just for themselves, but for others. How do you address fairness when dealing with buyers looking for their first home? First off, when working with Millennials, managing their expectations up front in terms of what is fair in the real estate industry will help. Second, make sure that negotiations with first-time buyers don’t get out of hand. Any indication that Millennials buyers are not being treated fairly will not be well received.
The previous two generations embraced the extremes in terms of behavior and ideology. In fact the idea of extreme sports was created by Generation X. The pendulum had to swing the other way, and it did. Millennials are more conventional in terms of sex, drugs and rock and roll than their parents. Mainstream media doesn’t always tell that story, but the statistics bear it out. It’s common for a generation to look at the behavior of previous generations and decide to take a different path. In this case, Millennials have chosen conventionality.
What does conventional mean out in the field when you are talking to Millennial home buyers? Certainly, conventional mortgages will appeal to them – more complicated mortgages like ARMs may not fly with these young people. In terms of homes and property, it’s easy: emphasize the conventional benefits of home ownership.
At this point, we should point out that the research of Howe and Strauss concluded that the Millennial generation is most similar to a previous generation – The Great Generation before the Boomers. The Great Generation survived the Great Depression and then went on to fight, and win, World War II. Think of your parents or grandparents. When we say that Millennials are conventional, that’s what we mean.
As a generation, Millennials saw a lot of pressure to succeed. Most of that pressure was channeled into getting into the right college, which translated into sports, music, art, volunteer work, AP courses…the whole nine yards. They have had much of their life scheduled for them by parents and schools.
As a result, Millennials depend on schedules and plans. They like to have structure, and they depend on good plans to get them through life. As planners, the home buying process should make sense to them. When working with Millennials, give them a plan, or even an outline of a plan, and they will pick it up and run with it. In the absence of structure, this generation does not do well, and they feel lost.
In comparison to previous generations, Millennials are very good long-term planners. Ask any admissions counselor at a college, and they will tell you that it was common for Millennials college students to have 5 and 10-year plans for their life. The ability to think long-term, as you might guess, is very good when buyers are entering the real estate process. This is a Millennial strength that you can capitalize on.
When you combine their sense of specialness with their confidence about the future, you begin to see what Millennials can achieve. They see that the American Dream is within their reach, and they aren’t afraid to work hard for it (no matter what you’ve heard).
You and your ability to help them find the right home is part of the dream they want to achieve. That’s a good place to be when working with Millennials, and you can make the most of it.
Homes for Heroes
We’ve mentioned the research by Howe and Strauss a couple of times, and there’s an important conclusion these two experts made about the Millennials. They call this generation a “Hero Generation”:
“Hero generations are born after an awakening, during an unraveling, when social institutions are weak and individuals have to be self-reliant and pragmatic. They are more protected than the children born during the chaos of an awakening. Heroes are believed to grow up as young optimists, into energetic and over-confident and politically powerful adults.” –Amanda van Eck Duymaer van Twist and Suzanne Newcombe
The last hero generation was the Greatest Generation, so we expect great things from today’s young people. At Homes for Heroes, we get heroes. For more than 20 years we’ve been working with them, helping them and rewarding them through our local real estate and mortgage specialists. Now we have an unprecedented opportunity to reach the largest group of home buyers — the Millennials. Help us help them by joining Homes for Heroes today.
Author: Bob Filipczak is the co-author of Generations At Work (first and second edition). He speaks on generational marketing and communications to organizations. His previous clients include the University of California Davis, the Association of Patent Lawyer Firms and the Space Telescope Science Institute.