Millennial Homebuyers

Nationally, about half of American homebuyers are under 36, according to the latest study on consumer trends from Zillow, putting them squarely in the Millennial camp, born from the early 1980s to the early 2000s.

Mail surveys from the National Association of Realtors indicate that first timers account for about 32 percent of all buyers, and Dallas Builders Association member builders ranked Millennials behind Generation X and Baby Boomers as their most common buyer in a recent survey.

The contrasting studies may be related to the methodology, but the Zillow study provides optimism about Millennial homebuyers.

Millennials have been slow to buy their first house—housing economists call this “delayed household formation” and cite it among Millennials as one of the biggest reasons we saw a slow housing recovery nationwide.

According to the National Association of Home Builders, 65 percent of Millennials hope to buy a single-family home. But this age cohort experienced the largest decline in homeownership rates since 2006. In fact, only 34.1 percent of Millennials own a home, down from 39 percent in the second quarter of 2010, according to the most recent U.S. Census Bureau’s Housing Vacancy Survey, which reported data from 2010 to 2016. A recent Pew Research Study further shows 32 percent of Millennials still live with their parents.

How do Millennial homebuyers fare in DFW? We’re experiencing record growth and are on track to add more than 100,000 jobs this year, causing price increases, especially for new homes. The median closing price for a new detached home in the Dallas-Fort Worth region increased 5.4 percent year-over-year to $305,637 in August, compared to the median closing price for an existing detached home, which is now $217,360.

“Market demand, increasing local regulations, and an ongoing labor shortage are all reasons why the average new home is more than $88,000 more expensive than the average existing home,” said Dallas Builders Association Executive Officer Phil Crone. “Obviously, that kind of premium is going to make it difficult for most first-time homebuyers to step into the new home market. We need to ensure our market and our industry meets the needs of Millennials as they hold the key to our region’s continued prosperity.”

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ebby halliday app

Consumers, especially Millennials, are changing up their house-hunting strategies. More than ever, buyers are relying on smartphone apps to discover available properties and narrow down their searches before getting in touch with a real estate professional.

Ebby Halliday Realtors has been on the leading edge of technology in the North Texas real estate market since they introduced a searchable website in the 1990s. Many brokerages weren’t even online then.

They are again shaping the technology landscape in real estate with the Ebby Halliday Realtors app, offering a plethora of powerful features and user-friendly components.

“The Ebby app is a natural extension of our website, ebby.com, said Randall Graham, vice president and director of marketing for Ebby Halliday Realtors. “We are dedicated to meeting all of our clients’ needs by providing advanced interactive mapping for consumers on the go.”

The app is proof of their expertise in the area of technology, showing Ebby “gets” the needs of modern buyers, particularly Millennials.

“This innovative app provides information in a natural way starting with a map, not a menu,” said Graham. “Just a few of the functions available to Ebby app users on the go include the ability to immediately find open houses and newly listed properties, and it’s easy to perform detailed searches and to share properties of interest with friends or your Realtor.”

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There are about 79 million millennials in the U.S., and their purchasing power is estimated to be $170 billion per year. This powerful demographic, born from the early 1980s to the early 2000s, now represents the largest group of homebuyers at 32 percent, taking over from Generation X.

But when it comes to millennial homebuyer behavior, it can be difficult to distinguish fact vs. fiction. We looked at information from a recent Pardee Homes and BUILDER survey, information from realtor.com, and the National Association of Realtors to cut through the noise.

millennial homebuyers

Photo: National Association of Realtors

We know that millennial homebuying behavior is different than older generations, like texting vs. calling when contacting their Realtors and extensive use of real estate apps to do their research (be sure to check out our blog post, 6 Ways Millennials Are Changing Real Estate Business for Everyone, to get the full breakdown.)

But what are the specific preferences of this new breed of homebuyer? Read on for 5 unexpected facts about millennial homebuyers and what they want in their home.

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Patrick

CNU’s 23rd Annual Congress in Dallas this week has been described as a gathering of city designers who’ve all “seen the same UFO” – they all seem to share this experience of being looked at like they’re crazy when they begin explaining their practice of city design. Yet, to me many of these ideas seem a lot like common sense. Maybe it’s the millennial in me. Nonetheless it’s inspiring to be surrounded by so many healthy, engaged people working to make our cities places that people love.

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The always-inspiring Gail Thomas began yesterday’s Opening Plenary  with video snippets of over 10 years of the Dallas Institute for Humanity’s symposium “What Makes a City”. Some of the most inspiring answers, from thought-leaders around the world posed that What make a city is….

Architecture & poetry; The character of the place; Form and process are interconnected. Form should allow groups to happen; We have a deep yearning for a place at the heart of city to just be there and experience the life of the City; Places where we can go to share ideas. We need places where these exchanges can happen; A city nourishes love,  rediscovering what it means to be human.

I’m running with Gail’s “Dallas the City of Imagination.” In Dallas, if you can dream it you just might be able to do it. I’ve heard others make similar comments – in Dallas you’re one of a few, rather than one in a thousand as in NYC. It’s a CAN-DO business environment. (Maybe that’s the Texan cowboy in us?)

Robert Wilonsky then introduced two local Mayors, Betsy Price of Fort Worth and Laura Maczka of Richardson. They had very similar advice about what’s worked to engage their resident and business communities.

Above all, Mayor Price stressed the importance of “true listening” as an art of hearing both the good and bad and making sense of it all to save tome, energy, and money. Fort Worth has engaged young leaders in its Steer Ft Worth program. Hundreds of residents under 30 showed up to their first happy hour at Joe T Garcia’s. No one had ever bothered to ask them to be involved. And when staff held the first all-Spanish twitter town hall, they gained 43,000 followers!

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Robert Wilonsky, Fort Worth Mayor Betsy Price, and Richardson Mayor Laura Maczka

The other big take-away is their plea for us to give our elected officials the tools they need to be brave. Send them info on best practices and help them understand the argument for what makes good planning, design, and neighborhoods.

Both Fort Worth and Richardson, are focused on becoming modern cities, with great amenities, while keeping the small-town feel of a great place. Amenities are a large component of neighborhood attractiveness – not just for young hipsters living car-free in the city. Even families in the suburbs want trails, parks, transit diversity, retail and social vortexes within walking distance.

Millennial Nation

In all, 63 million Millennials are working through society “like a pig in a python” as put by Todd Zimmerman of Zimmerman/Volk Associates. The next bulge in the market extends from 2003-2036, a demand for family housing as we marry and have children. The question though is whether we’ll be buying detached housing or want to remain in walkable urban environments without owning two cars. That will probably be determined by the quality of schools and availability of workforce-affordable homes. Even in the close-in suburbs of Dallas it’s hard to find a decent house for under $300,000 — a bit out-of-reach for a young school teacher and a city employee.

You’ve probably heard, Millennials are mostly single, highly social, early or unsettled in their careers, sensitive to greenwashing and oh-so green themselves, 17 percent of Millennials are foreign-born, and they’re not very into: NASCAR, golf, driving cars, hunting, or fishing (well, maybe those last two vary in Texas.)

Four different opinion polls between 2003 and 2013 each found that between 55-60 percent of Americans want to live in compact, pedestrian-oriented neighborhoods. In 2014, 62 percent of Millennials want that lifestyle. Demand far outweighs supply.

With walkable neighborhoods come clashes about street design. Smart Growth America has mapped pedestrian fatalities between 2003 and 2012 for their Dangerous by Design 2014 interactive analysis.

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The analysis makes a strong statement that when we design streets for maximum speeds only, we’re neglecting the safety of the pedestrian. When does human life become a top priority? Even more, what about quality of life?

A person’s percent chance of fatality if hit by a car increases dramatically with the speed of the car.

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Four DFW Neighborhoods

How do all these ideas play-out in DFW? To demonstrate, CNU brought three planning teams of professionals to join local professionals for a close analysis of sites in Burleson, Garland, and Fort Worth.

Garland

Sites were chosen by the strength of their local political leadership, where plans are most likely to be implemented. The projects are a reflection of CNU’s desire to make a lasting impression on each city they visit for the annual congress. In Dallas, the program inspired the Local Host Committee to also begin an ongoing Local Legacy Partnership project in South Dallas with Frazier Revitalization Inc and Partners in Progress.

You can see the results of the Legacy Charettes at a reception in the Adolphus Lobby today 5pm-6pm, open to the public.

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Creative Gateway into Crowdus Parkfrom Elm St in Deep Ellum

If you haven’t yet stopped by the temporary Crowdus Park in Deep Ellum (video linked here), you’re in for a surprise. Architecture and design firms Collision and TBG created an oasis with the help of an army of volunteers. It’ll be up through Saturday with musicians playing throughout the evening and a movie showing today at sunset. WFAA covered last night’s events. The Crowdus Park Facebook page has all the details.

Mike Lydon, Tony & Julie of the Street Plans Collaborative after their workshop building these benches from pallets.

Mike Lydon, Tony Garcia & Julie Flynn of the Street Plans Collaborative after their workshop building these benches from pallets.

 

 

 

Home For Sale yard Sign

You know those Millennials and how they want their mortgages with cheap rates and minimal down payments. They want speedy pre-approval and closings with no hiccups. And they want it all right now.

If that seems demanding, well, that’s the Millennial generation for you. The interesting news is, according to a recent survey by Better Homes and Gardens Real Estate, Generation Z is more willing to make sacrifices to achieve home ownership. That’s right: The same generation that knowingly misspells words all over Twitter and Facebook is willing to sacrifice more than the “y” and “o” in “your.” They say they’re willing to sacrifice social media access (HORRORS!) in order to own a home.

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621 Shoreview Front

Are you a Millennial with a couple of kids who is considering pulling up stakes from your urban home and heading for the homes and schools of the suburbs? Then you’ll find this house in McKinney mighty attractive, as it has all the things you want in a suburban enclave, with tons of things you never knew you needed.

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Sachse Home

This is a theme that was repeated over and over at the National Association of Real Estate Editors spring conference. With the Millennial generation becoming the newest cycle of homebuyers, we have to wonder what phase of their lives will influence trends in real estate the most.

This story in the Washington Post really summarizes the issue well. So, when millennials decide to settle down and have a family, where will they settle? Will they make compromises and stay in the urban core, with its dense population and small footprints? Or will they eschew that lifestyle for more open space, a yard, and other typical suburban amenities?

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