Across generations some things remain the same. Growing up, there are times when every kid can\u2019t wait to get out of their parents\u2019 house and live by their own rules. The first tastes of independence and adulthood \u2013 driving, going to college, renting an apartment \u2013 often culminate in those kids growing up to purchase a home of their own.<\/p>\n
That is, until 2008 when the U.S. economy crashed and many of those \u2018kids\u2019 (now newly graduated millennials) decided that given their staggering student debt combined with a lack of employment opportunities available, moving back in with Mom and Dad seemed like the most sensible thing to do. Fast forward to 2018, with a healthier economy and a robust real estate market in many major U.S. cities, and millennials are (finally) ready to purchase real estate.<\/p>\n
However, now empty nesters, Mom and Dad don\u2019t need that five-bedroom two-story home anymore, thus providing the backdrop to a new clash of the titans \u2013 baby boomers and millennials actually want to live in the same places.<\/p>\n
In some urban markets, for the first time ever, it\u2019s a battle-royale between boomers and millennials.<\/p>\n
Both groups want the same things from a home as they enter a newly found independent stage of life. Boomers, who watched their 401(k) and home equity accounts dip during the recession are now enjoying the robust economy they were promised at retirement. Selling their home and walking away with a substantial amount of money is allowing them to make some pretty fun life decisions.<\/p>\n
At the same time, millennials are pulling blankets down from over their eyes after having lived for the past half-decade in a state of fear watching many of their older friends and parents live through some pretty difficult financial situations. But, because they lived at home during that time, and many of them did garner high income earning jobs, they are sitting on some cash and it\u2019s burning a hole. So, \u201cwhat should we invest in?\u201d they ask. The common answer and eventual decision is real estate.<\/p>\n
In short, fun and convenience.<\/p>\n
Baby boomers are not looking to retire to sleepy, quiet communities. Instead, they\u2019re heading downtown to be close to the amenities a city has to offer \u2013 restaurants, theater, museums, entertainment and more. The revitalized downtown living areas that were conceived for millennials are often equally appealing to boomers. As AARP points out, boomers are buying into an \u201curban retirement\u201d and downsizing into the upscale, amenity- rich, full service apartments.<\/p>\n
According to the National Association of REALTORS\u00ae 2018 Home Buyer and Seller Generational Trends study, millennials are now the largest share of homebuyers. However, they\u2019re not interested in the larger, suburban homes baby boomers are now looking to unload. True to this generation\u2019s style and swagger, convenience is key. (Thanks again, Uber!) This has led to an interesting real estate market in that both baby boomers and millennials are after the same things \u2013 smaller homes in more urban, walkable suburbs and cities, with coffee shops, bars, restaurants and other amenities just around the corner.<\/p>\n
The answer is not a simple one. While boomers may be sitting on a larger amount of cash and can appear to be financially stronger to a seller, millennials are exceptionally skilled when it comes to home-finding.<\/p>\n
Patience is low, and instant gratification high for millennials, and with the tech at their fingertips, they are able to pounce on real estate opportunities they often find out about before the generational competition.<\/p>\n
With the help of aggressive real estate agents and tech tools so synonymous with the younger generation\u2019s lifestyle, the first one to make a strong offer can have the edge.<\/p><\/blockquote>\n
With the help of aggressive real estate agents and tech tools so synonymous with the younger generation\u2019s lifestyle, the first one to make a strong offer can have the edge.<\/p>\n
Christian Klempp, a condo expert and licensed REALTOR\u00ae with Engel & V\u00f6lkers Minneapolis, has also observed the phenomenon. \u201cThe ability of many baby boomer buyers to use cash to purchase remains a huge competitive advantage,\u201d notes Klempp. \u201cOlder, experienced buyers are also more comfortable forgoing inspection contingencies and streamlining the extensive disclosure requirements involved in a condo purchase.<\/p>\n
He does, however, agree that this is a trend gaining momentum.<\/p>\n
\u201cYoung professionals shopping for an urban primary residence are competing with their parents as downsizing empty nesters in search of the same urban living experience and turn key lifestyle.\u201d<\/p>\n
HOW DO WE AS PROFESSIONALS COUNSEL OUR CLIENTS?<\/h3>\n
Setting expectations is crucial. Spend some time with your clients in the urban areas they\u2019re considering making their investment. Purchase them a gift card or two for some of the local establishments that make that area famous. Give them an immersive experience. Most of the time, specifically for the boomer generation coming from the suburbs, moving downtown is going to be a huge life adjustment. If they have a vision of what it\u2019s going to be like living \u2018in the city\u2019 and reality ends up being quite different, it is because we, as real estate professionals, failed to educate or help set those expectations. While they might be listing the place again soon, it unfortunately will not be with you.<\/p>\n
If they have a vision of what it\u2019s going to be like living \u2018in the city\u2019 and reality ends up being quite different, it is because we, as real estate professionals, failed to educate or help set those expectations.<\/p><\/blockquote>\n
For the younger crowd, it\u2019s all about making sure their finances are in order and they are ready to rock in a competitive situation. As Klempp suggested, the cash heavy boomers have a potential distinct advantage over their younger counterparts. Getting pre-approved, being swift to not only see a listing but offering on it, appearing financially solid and working with reputable lenders will be paramount to their success in winning the deal.<\/p>\n
As a professional, it\u2019s important to notice these trends. It makes for some very interesting conversations and needed knowledge in the area of inventory and demand. Preparation, as they say, leads to execution. Boomers, don\u2019t let the kids have all the fun. Kids, be nice to Mom and Dad. You\u2019re neighbors now. GEOFFREY BRAY<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"
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