The impactful strides towards economic recovery have resulted in an influx of millennial homebuyers. The ability to pay their debts and advancements on time through their careers has accelerated confidence in owning homes. In fact, the homeownership rate is four times higher than any other age group, making this a heated topic of discussion. According to projections soon, the smaller cities will run out of space, owing to the housing boom powered by this generation. However, millennials do not view homeownership as permanent as they change houses from now and then. Let’s review the expected millennials’ impact in the housing market:
No life of a millennial is complete without technology. It is not a surprise; most of them deploy technology in the process of buying homes. This has fundamentally changed the duties of real estate agents and brokers. As a result, the housing market has adapted to new marketing strategies and methods.
The standards of living in urban centers have soared, as the majority of the millennials nowadays are opting for suburban homes. Mostly rental market is the contributing factor to urban life audacities. Due to the many cost-conscious millennials, the housing market will have to shift for cheaper suburban homes.
As the economy continues to strengthen, the majority of the millennials will actively participate in the housing market. This will contribute to higher levels of competition in the housing market as investors strive for perfection to satisfy their customers. This means the commercial real estate investors will have to focus on new constructions rather than the “fixer-uppers.”
Transparent Information and Communication
Due to the housing crisis and frustrations, many millennials value having access to trustworthy information. Thus, the housing market will have to adjust to an airtight system of keeping the customers happy and mitigate the risks. This is only achievable through authentic communication mechanisms.
Millennials will continue to shape up the housing market according to housing dynamics. Their preferences will be significantly crucial to favorable housing market evolutions.
For many Americans, owning a home has long been the way to accumulate wealth. Over the years a home will appreciate in value, or so people assume. Investing in the stock market, for those who have the means, is also an effective way to build wealth over the years.
A decade ago, when the housing market crashed in the Great Recession, the idea of building wealth through real estate was shattered. People saw how real estate values can fluctuate. Still, many millennials who witnessed the housing crash, are eager to invest in real estate. In fact, a recent real estate investment report delivered survey results showing that 55 percent of millennials are interested in real estate investing. Here are three reasons that millennials are interested in real estate investing.
Growth Over Time
The subprime mortgage crisis sounded the beginning of the Great Recession back in 2008. The bubble in the real estate market burst and housing prices plummeted. The real estate market has had a long climb back over the past several years. The point that millennials see though, is that the market did come back. The millennial generation did not rush into home buying, but now are moving into the home buying phase. They are the largest generation of Americans and will have a profound affect on the housing market.
Stock Market Skepticism
Anyone who has taken even a slight interest in the stock market knows that stocks go up and down. However, the millennial generation had a harsh, real-life lesson in this aspect of the market. Many millennials graduated into the Great Recession and the daily headline news about Wall Street crashing and people losing retirement savings. A large portion of millennials believe that real estate outperformed the stock market since 2000, and they are correct. Their witnessing of the Great Recession may make the millennial generation more likely to be skeptical of the stock market.
In this age of information it is easy to gather data about investing. The methods of investing in real estate are available to any millennial who wants to do some research. There is a tangible element to real estate investing that may appeal to the millennials sense of self-image and desire for uniqueness. In fact, findings show that 85 percent of millennials think real estate is a good investment.
Older generations may be interested in downsizing at this point, but millennials are starting families and advancing their careers. These facts, along with the great potential for positive returns, make buying a home and investing in real estate an appealing next step for millennials