Why is it that the Millennial generation is looking more than ever to purchase their first or “next” home as a brand new home?
Gone are the days of the average home buyer who is looking for a home that “ needs a little work”. There are very few of those below 30 that were raised by their parents with the skills and knowledge to know how to renovate a home. In fact few possess the skills to know how to operate a power saw or the drill…and itsNOTtheir fault. Most of their parents were raised in a generation where being handy at home was not for them…they had their careers to work on and friends and the internet had come along. The handy home repair requirements were taken care of by their parents (Millennials grand parents) so the kids didn’t have to. Well, launch forward 20 years and the children (our Millennials) didn’t grow up with any role models to have learned anything about how to utilize some of the common power tools, much less take on the task of renovating a home. Unfortunately its not something that SIRI can answer for you either.
So what does this mean to New Home Builders and Renovation companies out there? Well it means they have a whole lot more business coming their way, and its only going to grow.
“Buying a new home directly from the builder, whether a condo, townhouse or detached, is a popular choice. Almost one third of all homes sold in Canada each year are brand new. In Ontario alone, more than 52,500 buyers opted for a new build last year, and a forecast by the Canada Mortgage and Housing Corporation (CMHC) predicts that number will only climb. “ Romna King, Money Sense (http://www.moneysense.ca/spend/real-estate/the-top-10-mistakes-new-home-buyers-make/)
Millennials are looking for a turn-key home where they can just move in that is close to the many amenities of their community, close to friends and public transportation and that is self -contained not requiring much in the way of maintenance, or carries a monthly fee that takes care of those many needs. They also want a new home that offers the most advanced technologies available that suit their lifestyle, allow for continued and uninterrupted enjoyment of social media and other online experiences and, with a large component of people working from home, the ability to have speed, access and office space related to day to day business is key.
The biggest difference in today’s home buyer however is NOT that they don’t have the handyman skills their grandparents possessed, but the seemingly innate ability to know how to research and find out so much information about a home. The days of relying on a REALTOR® or the show home staff member are not what they used to be.
Buyers today know the marketplace, they know the inventory by checking out sites likeNewHomeListingServicewhere they can find all of the Builders and their product in one place and do a great deal of research before they ever talk to a Builder show home person or an agent. These sites operate like the Trivago and Hotels.com of the world that amalgamate all of the hotels in one place allowing you to choose what hotel works best for your needs. NewHomeListingServicedoes the same thing for the New Home Building industry. Today’s buyers of new homes are aware of the average costs of home and readily compare amenities and features of various homes and conduct a ton of research long before making that decision. So what can Builders and REALTORS® do to prepare for this?
Builders first of all have to market where these buyers are looking and that is totally online. Now many Builders have a website which is great. But here is the problem for the consumer. If you plan on buying a new home and rely on the websites, you now have a great deal of research to do. There are literally 100’s of Builders in each community offering a variety of inventory, some available soon, some not available until after an 8-10 month build time. Each one features their upgrades differently and some will publish their prices while others will not. Consumers who have experienced online experiences like booking a hotel are looking for that same experience. They don’t want to be creating spreadsheets to cross compare features, pricing, amenities. They want it all in one place so they can quickly make a very educated decision. Why? They don’t have time. Their lives are filled with social interaction both online and off and life today is as busy as ever. Consumers of old never experienced a faster experience, so never demanded it. Years ago Real Estate agents used to have a printed book of listings and consumers relied on them to know what was for sale and to take them…….years after sites like REALTOR.ca exist, people would be angry if they were told they had to do their own research or rely on others to get them information.
REALTORS® also have to be able to quickly find information as there are many new buyers who simply don’t have the time to spend online looking and rely on a professional to do the research for them. That doesn’t mean they will accept a few properties to look at. They expect that agent to show them ALL of the possibilities. That means a lot of research for agents and a lot of time lost all while their own client may just walk into a show home and buy without them. Knowing about sources like NewHomeListingService, and others can accelerate that research and make it so much easier to help Buyers find Brand New Homes….remember they don’t want a “fixer upper” and grandpa sure as heck isn’t going to be able to help them out too much….well maybe a little but guessing with the vision being not what it used to be things may not be as straight as they hope.
New Home Buyers is where the future is. They are either buying a brand new home, which is great for Builders if the can bring the many features to a home that new buyers want, or fantastic for the business of renovation companies. Either way the new young buyers are a force that need to be considered and knowing where to advertise new homes or where to help your young clients find new homes will be crucial to your future success.
Finally I wish to share a very concrete example of how the new buyers have changed from the old. I recently had the pleasure of helping my young son-in-law renovate a large bedroom into two smaller rooms. Of course since it was his house and he is a great guy he asked if I would be willing to let him build the one closet….I said sure. I gave him some directions and all the materials as he wanted to try it himself and I set on my way home. Half way home I received a call about how to change the bit in the drill (it was an electric drill) so I told him to use the “bit chuck” at the end of the cord, place it in the end of the drill and twist to loosen the bit to change it. He saw the “chuck” attached, said sounds good and hung up. About 5 minutes later he called back laughing so hard he could hardly speak. Unfortunately he had watched some drills on TV and assumed that all he had to do was put the “chuck” in and then leaving it plugged in press the power button to loosen it. Well anyone who has used a traditional power drill knows where this is going. Yes within seconds he discovered that he almost broke his wrist and proceeded to see the drill fly through the air as it wrapped itself up in its own cord. Now I was the one laughing too hard to speak. Millenials…..love their enthusiasm and I truly believe they are such a gifted and talented group, but unfortunately the skills of old are a dying one and Builders, Renovators and REALTORS® need to know how much this is going to impact them in the future.