Buying a home is a bit different today than it was 30 years ago. And with a whole new generation of homebuyers, how can builders engage with them?
Let’s start by taking a look at who the target is today. It’s that dreaded M-word: Millennials. So what does that label really mean? Picture in your mind a Millennial. It’s okay, I’ll wait…Got it? Good.
Did you picture an over 30 professional who is married, possibly with children? Because that’s what a lot of Millennials are. The older part of that generation is pushing 40 years old and is the single largest home buying audience out there right now. That sounds a lot like previous generations of home buyers, so what are the factors that make this generation so different from prior? I believe it falls into 6 major talking points:
- Stagnant wage growth vs rising home prices – Millennials have seen home prices rise far faster than their wage growth and that greatly affects the timing of buying a home.
- Number of homes available (even fewer starter homes) – The number of homes isn’t currently sufficient for the size of the homebuying population. I won’t get into all of the factors here, but the 2008 economic downturn, people living longer, and more concentrated population areas all contribute.
- Willing to wait longer to own – The first couple of points here contribute to this, but also because of the available information, Millennials are far more willing to wait for the “perfect home”.
- Begin home search online – Millennials are the first generation to grow up with the internet present from their youth, so it has become their main source of information. Therefore, it all starts online as opposed to the methods of the past.
- Heavily invested in reviews and ratings – Millennials are more likely to move for job opportunities and live in larger cities, so the network of friends and family isn’t always present. Reviews and ratings present the best way to evaluate builders in an unfamiliar area.
- Less concerned with brand name vs freedom of choice – To go along with investing in ratings and reviews as well as searching online, brand name isn’t a top priority for Millennials, often opting for better choices for what they want versus an established company.
As a builder, you can’t generally do much about the first bullet point, so while it’s a factor, it may not be entirely relevant for the talking points. And the second point is something that builders are actively trying to remedy by building more homes, so the main focus is turning the last four points into your advantage. But how exactly can you do that?
Start by making sure your presence is well established online. You can see from several of the points brought up that a builder’s internet reputation is very important and will help define who finds you when looking for a new home. This isn’t just for Millennials: most every generation looks at reviews online and not just for homes. If people won’t go to a restaurant or buy a $10 item off Amazon without looking at the reviews first, then why would they buy a home they have to live in for 30 years?
Next, understand your audience and what they want. There are simple ways to entice a new generation of home buyers to look at what you’re building without totally changing how you do it. For example, people are starting to invest heavily in smart home products. The presence of something as simple as a smart thermostat or video doorbell on a home can entice buyers into looking at your homes.
And finally: don’t get complacent. The best companies out there right now don’t wait until they are in dire straits to innovate. Amazon had a corner on shipping with their Prime 2-day shipping, but they upped their game to 1-day shipping before people could even compete. Starbucks had a line in almost every shop in the morning and instead of letting people linger, they introduced an app to place an order and skip the line. Get feedback from your customers and change what needs to be improved, but also look at what you do well and see if there’s a way to take it a step further. People in today’s world are willing to pay more for great customer service!
There are a lot of other factors that go into today’s home buyers and ways to reach them, so if you’d like to learn more, Watch The Webinar On-Demand.