The median age for a first-time home buyer in the United States is 31—squarely in the millennial generation, which includes people in their late-teens to about 36 years old. And according to a 2017 National Association of Realtors report, this cohort, who purchased 34% of U.S. homes between July 2015 and June 2016, has real purchasing power.
Real estate pros from around the world are still figuring out how to best appeal to this buyer pool, experts say. But according to Dolly Lenz, the founder of New York-based Dolly Lenz Real Estate, a layered marketing approach with multiple touchpoints works best.
"You can’t just post a picture on Instagram and expect someone to come and buy that property," she said. You need that social media presence, of course, but also data about the neighborhood and the property’s appreciation potential, access to creative financing options, and a not-to-be-missed event to get them interested and in the door, she explained.
"While baby boomers want to see the value of a potential property purchase, such as a good price per square foot or larger-than-average space for the neighborhood," Ms. Lenz said, "millennials need to see themselves living there."
"They’re more about an experience than anything else," she added.
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Make sure the property is ready for its close-up
Before adding the first layer to the marketing approach, experts agree that a property must have specific features that appeal to millennials—the first being a walkable location with easy access to restaurants, coffee shops and entertainment options.
In Manhattan, Ms. Lenz said that her younger buyers tend to prefer the West Village, East Village or Upper East Side, where many of them grew up, and choose to return to when they’re ready to settle down.
In Los Angeles, hip Eastside neighborhoods such as Silver Lake, Echo Park and Eagle Rock, are in demand, according to real estate investor and mortgage consultant Thomas Bayles, the CEO of Urban Asset Group, who’s flipped about 20 properties in the last five years and sold them to millennial buyers.
And in the young and tech-centric city of Berlin, neighborhoods including Charlottenburg, Mitte and Kreuzberg are favored by wealthy young buyers, said Dorothea Metasch, the head of marketing at Ziegert Bank and Real Estate Consulting.
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Inside the home, millennials buyers are interested in on-trend materials and finishes, such as cement tiles, brass fixtures and interesting wallpaper, said Mr. Bayles, 31, who just finished renovating his Silver Lake-adjacent Atwater Village home, which includes a funky green wallpaper in the master bathroom.
They also appreciate homes with a thoughtful use of space, like a kitchen nook that could double as a home office or storage under a staircase, he said. "Most would take a smaller, well-designed space over a home with massive square footage," he added.
Millennial Buyers appreciate homes with a thoughtful use of space, like a kitchen nook that could double as a home office, expert says.
Schinkestraße Taymur KhanBecause they’ve become so used to co-working spaces, and the share economy, they’re also interested in homes with space they could rent out, Mr. Bayles said, such as a studio attached a garage. "They’ll look at that as a possible income stream," he said, "but also as a way to make new friends from around the world."
Most will expect a home that’s modern, updated and move-in ready, experts say. But some will have some flexibility, especially if a property is truly special, Ms. Metasch said, noting that a millennial buyer might consider purchasing a massive loft in an "up-and-coming" neighborhood if they think it will be a solid long-term investment.
Social media and an online presence matters
Once a property is ready for that close-up, creating a strong online presence, where potential buyers can access a virtual walk-through and key facts and visuals is important, experts say.
"Many [millennials] cyberstalk listings through online services such as Zillow," wrote Tami Pardee, the CEO and founder of Halton Pardee + Partners in L.A., in her 2018 Housing Trends report. "Often we are not aware of individual buyers until they show-up at an opening."
Having a strong social media strategy from the outset of a sales process is also key, experts say. But while sharing swoon-worthy photos on Instagram isn’t enough to get a deal done, Ms. Lenz said, not having photos showing off a property in its best light means a lost opportunity. "You might get away with so-so photos if your client is a boomer," she said, "but if you lose a millennial with photos, it’s over."
Mr. Bayles said he’s also had luck with advertising in hyperlocal online publications, rather than big name pubs such as the New York Times or Los Angeles Times.
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Once potential buyers are in the door, whether that’s at an open house or private showing, Austin, Texas-based realtor Brennan Stravlo, who’s an associate at Kuper Sotheby’s International Realty, said he makes sure every house a millennial considers is "HGTV ready."
He also comes ready to answer their often-in-depth questions about financing, appreciation and resale potential, which older buyers sometimes overlook. "Millennials ask amazing questions," he said. "They want to know everything about a property before they make a decision."
To seal the deal, host an event that helps them imagine living in the space
One of the most important elements of Ms. Lenz’s layered approach to appealing to millennial buyers is hosting a highly curated event, co-branded with a cool coffee shop, wine bar or restaurant, such as the Jean-Georges restaurant in the Ian Schrager-owned Public Hotel. "You want these young buyers to see themselves having coffee and entertaining there," she said. Partnering with an on-trend business gets this group of buyers in the door.
Ms. Metasch said she’s hosted similar events in Berlin, including a three-course dinner for 20 to promote the new AM Hochmeisterplatz development, prepared by master chef Duc Ngo, from the uber-hip Japanese restaurant 893, located a few blocks away. Another event, held to promote the Kronprinzengaerten project in the Kreuzberg neighborhood, was a fashion show for a hip Berlin-based designer, in which the terrace was transformed into a catwalk.
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A fashion show on terrace was held to promote the Kronprinzengaerten project in the Kreuzberg neighborhood, Berlin.
Ziegert Immobilien"We try to bring together an interesting group of people, so that even if they don’t buy in this development, we’re in contact with them afterwards," Ms. Metasch said.
"It’s not just about selling real estate," she added. "We want to create a really special environment that feels like home."
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Let millennials sell to their peers
A final way to appeal to millennials, experts say, is to let their peers sell to them directly.
Ms. Lenz said that she hired her 27-year-old daughter and several other young professionals who innately understand what millennials want, and can speak to them in their own language and on their own terms.
Even though he is a millennial, Mr. Bayles said he similarly hires people even younger than him, including hisbrother, 27, and his best friend, 26, to ensure his team is on the same playing field as their buyers. "We understand their fears, their concerns and their must-haves," he said. "It does make everything a little easier."