The Millennials: A New Market and a New Generation
Today, we are honored to have Justin DeCesare, CEO of Middleton & Associates Real Estate in La Jolla, as our guest blogger. Justin has written a manual for new agents that is a must read for the new technology centered Real Estate market. It is available online in both print and Kindle editions. – The KCM Crew
The market is back and it is back with a vengeance.
As salespeople, the key to our livelihood is to identify and, in turn, assist the groups of consumers who will be making the largest impact on the home-buying market.
In this new market, one of the key demographics to the housing recovery will be an unlikely hero… MILLENNIALS.
Many people shudder when they hear the name coined for my generation born between the early 1980s and late 1990s. We are portrayed as lazy, late-bloomers who fail to participate in the economic arena and, because of this, play an important role in the ruin of America.
I do exaggerate slightly. However, the preceding statement is not that far from the truth. Millennials are often ignored as an important purchasing demographic and, until now, rightfully so.
With an apparent lack of prospects and a pessimistic outlook on the future economic climate, the recent recession has delayed the normal timeframe when most early-30 and 20 somethings have historically ventured out into adulthood. Since the beginning of the market crash, unemployment and student loan debt shot through the roof as the employment prospects for young adults dwindled to levels never seen since The Great Depression. Without personal economic growth, young people have stayed close to home, married less frequently and purchased fewer homes. Millennials watched as the markets continued to decline and, like the rest of the country, watched and refrained from buying.
Contrary to the beliefs of Baby-Boomers and Generation-Xers, Millennials are not refraining from participating in adulthood by some self-limiting choice; they are doing so because they are a product of the macroeconomics. Now that the economy is on an upswing, it is important for every agent out there from young newcomers to veterans, to understand that this generation is set to play a very important part in the housing market.
There are two important factors in the importance of Millennials as a purchasing power:
1. The Technology Sector and Employment Rates
The technology sector can’t even be considered a single sector anymore. Technology has infiltrated so much of our daily lives that every sector has the need to enrich itself with new technology. Millennials are at the heart of this emergence with new technologies are upon us almost every day. Yes, America has a trade deficit in consumable items like cell phone production, but we are a world leader in big technology, such as commercial communications and finance technologies. It is my generation who has been going to college for the last 10 years to be graced with a career in these sectors and, as large firms begin hiring again, adaptable and eager Millennials will be the ones earning the income.
2. The Length of Time Millennials Have to Make Back Their Income
This doesn’t really need that much explanation. Recessions happen and they have impacted every generation at some level ever since the Declaration of Independence. Millennials, much like those that came of age following any great recession, stand to make fortunes in emerging fields. The emergence of National Finance, Big Oil and the Steel Industry are a few prime examples. The new growth in wealth will, at some level, incorporate technology. Millennials will be the ones who will partake in its rewards. Like our predecessors, we will look back with pride in the fact that we made it through the recession of 2008 and are now stronger because of it.
Middle-aged individuals will certainly play an important role in the housing market, but they have not been ignored as a potential goldmine for agents everywhere. As the economy becomes stronger, Millennials will begin spending their money again and will do so in mass quantities.
I manage a Brokerage in La Jolla, CA. Agents have a tendency to get jaded even here in one of the country’s most beautiful zip codes. I hear “new bubble” thrown around daily because people are afraid to be optimistic. I witness agents pass over young home buyers because of the following excuses: There is “too little” inventory, it will be too hard, or it is not worth their time.
Get over it.
The world changes and we must change with it.
Agents that learn to find business before it arrives will be the ones making all the money throughout the market upswing. Young buyers will turn into families, investors, and Heads of Corporations.
The market is back and with it is a new wave of purchasers… It is now your job to find them.
Trust me when I say you won’t find them in their parents’ basements for much longer.