NMS Properties, Inc.
Neil Shekhter - NMS on How Millennials Are Changing the Real Estate

 Millennials are defined generationally as the group of children born between the years of 1981 and 2000. This generation is unfairly characterized as lazy and entitled, and as likely to live at home with parents well into adulthood. However, this group accounts for half of homeowners under 36 and half of sellers under 41 according to Zillow. Zillow executives insist that this points to an active force in the real estate market.

As they become thirty-somethings, they largely decide to become homeowners. Because this generations does live at home longer than previous generations, they are normally more stable and have higher incomes when they enter the market. It also means they have more money saved to purchase these homes, and it is an emerging trend that because of these factors, they are skipping the traditional starter hones for more expensive models, according to Neil Shekhter, founder, and CEO of Santa Monica-based NMS Properties.

Slightly more than a third of millennials are estimated to be homeowners with a vast majority buying in suburbs and rural areas. Interestingly, the amount of millennials choosing to buy in small towns mirrors the number buying in urban areas at around 15 percent. The vast majority of millennials purchasing homes are married with only slightly more than 10 percent of millennial singles purchasing, and this is mostly comprised of millennial women.

Initially, this group entered the market buying urban real estate, but now, approximately 50 percent live in suburban areas. Millennials are also more apt to purchase stand alone homes rather than apartments and multifamily dwellings. They are also choosing what are termed secondary markets. These are mid sized to small cities that are experiencing rapid growth like Austin and Seattle with these two cities being the most sought after markets.

That this group is highly nomadic is really anecdotal because the data does not reveal that this is the case. With this generation as with prior generations, as they age and become parents with families, purchasing homes begins to become more necessary. This makes this behavior a significant driver in the housing market currently. Some forecasts missed this because they assumed participation in the sharing economy meant this group would shun home ownership.

Millennials also prioritize the quality of their neighborhoods as well as their neighborhood's proximity to workplaces and resale value, and they require these in suburban and rural spaces. Other significant selling points are school quality, and proximity to family and friends, Neil Shekhter notes. This behavior is different than prior generations who were more apt to move to where jobs were regardless of that location's ability to deliver a quality lifestyle. Millennials know that employers will relocate to exploit their work base.

Millennials also find their homes differently than any previous generation, Neil Shekhter points out. Practically all millennials employ online real estate resources not only in finding an actual home but also in navigating the loan process. Almost three quarters of those that originate their efforts online eventually utilize the services of a real agent. They have more choices than previous generations because the market is willing to cater to their needs unlike previous generations who expected a choice from what was available.