We’ve mentioned recently, and you’ve no doubt seen it in your real estate practice, that baby boomers are large and in charge of the housing market.
“In 2023, baby boomers overtook millennials as the greatest percentage of homebuyers in the U.S., making up 39% of the market compared to 28% for millennials (and 24% for Gen X),” suggests Dawn Allcot at Nasdaq.com.
This cohort makes up the largest share of home sellers as well, setting up a scenario where a whole bunch of agents will have the opportunity to get two deals out of one client.
They win bidding wars
Listing agents know well how challenging it sometimes is to calm down the seller who is receiving multiple offers. It’s heady stuff to have a group of people vying for your home, and visions of “over-asking” often dance through their heads.
Counseling the seller to also compare the terms of each offer is a wise move. Is the proposed closing date most convenient for your seller? What about the amount of cash the buyer is willing to put into the deal?
“With all this in mind, new research from Realtor.com shows that baby boomers have the upper hand when it comes to sealing the deal on the next home of their dreams,” according to Allcot.
The ideal next home for the baby boomer
It’s easy to make assumptions about what type of home our aging population is seeking. And many of those assumptions are valid. One-story homes, for instance, are in great demand, as are homes with wide halls and doorways to accommodate a wheelchair in the future.
A few other items that are on the wish list of older clients include:
A walk-in shower
Lowered countertops
No stairs, inside or out
A home office for those who haven’t yet retired
Think they don’t want to sell? Think again
It’s common knowledge and a bone of contention for younger homebuyers that our older generation refuses to budge from their family home.
A 2021 AARP survey found that more than three-quarters of adults ages 50 and older want to stay in their current homes, also known as aging in place.
There’s a problem with that, however. “A significant majority of adults want to continue living in their homes as they age, but the unfortunate reality is that many homes and communities weren’t built to support that desire,” according to Rodney Harrell, AARP Vice President, Family, Home, and Community.
AARP finds in another study that “About half of adults say they’d consider leaving their home if it meant finding one that would help them age independently,” said Anna Deen at TheMessenger.com.
I smell an amazing real estate niche in there, don’t you?
As you tour new listings, pay attention to the layout of the home to determine if it’s move-in ready for a boomer who wants to age in place. Even homes that require minimum renovation are attractive to this generation, so don’t ignore those, either.
Then, do consider reaching out to the baby boomers in your CRM.
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We’ve been hearing for years that Millennials are dominating the real estate market. But which markets are they choosing?
It’s not urban centers. A lot of the time the cities they choose aren’t even among the largest in the state. Over the past few months, with the ability to take their jobs with them and work remotely, we’re seeing increasing numbers of the cohort choosing ever-smaller cities in which to settle down.
The folks at Ellie Mae® periodically release their Millennial Tracker™ “… a web-based application that tracks closed loan application trends for U.S. homebuyers born 1980-99.”
Ok, we could quibble with their dates for the birth of Millennials (born 1977–1995, according to the Center for Generational Kinetics), but we won’t.
Obviously, this study is based on younger Millennials, who are just as active in the real estate market as their elders.
Real Estate Times Series
We thought it would be fun to take a look at the 5 hottest markets for Millennials over the past few months, according to Ellie Mae research.
1. Dumas, Texas
Dumas, Texas, with a population of 14,775 has, since 2010, experienced a population growth of 3.9%, according to BestPlaces.net.
So, why are folks flocking to this small Texas town?
The cost of living. It is more than 21% lower than the U.S. average.
Located in the Texas Panhandle, about 45 miles north of Amarillo, Dumas is the seat of Moore County and the energy and agriculture industries fuel Dumas’ economy.
If you sell real estate in the area, you’ve seen the influx of Millennials over the past year and locals expect it to continue. In fact, 70% of closed loan applications in Dumas, from May to July of this year, were from Millennial homebuyers with a median age of 30.
2. Eagle Pass, Texas
Another Texas city takes the number two spot in popularity with Millennial homebuyers. Google searches for the area include:
Is Eagle Pass TX safe? (you aren’t allowed to answer that one)
What is Eagle Pass known for? (the first American settlement on the Rio Grande)
How far is Eagle Pass TX from San Antonio? (143 miles)
How far is Eagle Pass TX from Houston TX? (336 miles)
Seventy percent of closed purchase loans in Eagle Pass, over the past three months, went to Millennial homebuyers.
The average age of these borrowers is 32, most are married (66%) and the largest share used a FHA-backed mortgage with an average loan amount of $162,205.
What makes the Eagle Pass real estate market to attractive? One factor is that folks get a lot more house for the money here.
For instance, there is an adorable home listed as of this writing, that features 3 bedrooms and 2 bathrooms in nearly 1600 square feet of living space. Price? $185,000.
Jobs in Eagle Pass are primarily in food manufacturing, import, freight forwarding/transportation and retail.
3. Hastings, Nebraska
Hastings’ high placement on Ellie Mae’s list doesn’t surprise local agents. For at least three years now, North Dakota has ranked as the nation’s city with the highest percentage of Millennial residents.
Real Estate Times Series
Located 2 hours and 22 minutes southwest of Omaha (or $24 on an Amtrack train), the city boasts a population of 24,822 (as of 2018).
Major industries in the region include:
Education & Health Services
Manufacturing & Construction
Wholesale & Retail Trade
Job growth in the city was a sluggish “… 0.0% over the last year,” according to bestplaces.net. “Future job growth over the next ten years is predicted to be 24.9%.”
So, Millennials aren’t moving here for the jobs. They are most likely bringing their jobs with them as so many are doing since the outbreak of COVID-19.
4. Midland, Texas
Midland, Texas is hot, hot, hot with Millennial homebuyers. The city showed up on Ellie Mae’s tracker as number one with Millennials as far back as November 2018 and it’s back in 2020 – at number 4.
It didn’t happen by accident, however. Midland city leaders understand that building a culture for new talent “… requires intention,” according to Nina Ignaczak with modeldmedia.com.
Some of the credit for Midland’s popularity with the cohort also goes to fact that “Per capita personal income in Midland is the highest in the state,” according to dallasfed.org. There’s a lot of money to be made in the Midland-Odessa region.
Millennials account for 65% of closed mortgage applications in Midland during the period researched. Sixty-two percent of these borrowers used a conventional loan for an average purchase price of $273,555.
5. Williston, ND
Another city that shows up just about every quarter on Ellie Mae’s list, Williston North Dakota is a Millennial magnet. In fact, the entire state is a hotbed for the generation.
Moneyrates.com chose North Dakota as the best state for the Millennial generation. “North Dakota’s rise as a great state for millennials is due to a mix of business and pleasure,” the report claims.
Williston, for many reasons, ranks high on the cohort’s favored North Dakota cities.
Over the past few months, 66% of closed loan applications for homes in Williston came from Millennials. They, by and large, used conventional loans (66%), and boast an average FICO score of 745. The average age of these homebuyers is 32.
Millennials began surging into Williston during the oil boom which, in turn, prompted city leaders to create more sports and recreational amenities.
That response paid off when new, Millennial-attracting businesses rolled into town.
Nearly 60% of these Millennial buyers in Williston secured a conventional loan for an average purchase price of $261,305.
Real Estate Times Series
Send the Mortgage Hits Lowpostcard from the Real Estate Times Series to your list of millennials or any area where you are interested in getting more buyers.
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