After spending more than a year researching the local real estate market and home values in his area, Javan Cheetsos, 31, worked with Better Homes and Gardens Real Estate Ventura Barnett Properties to buy his first home where he planned to raise his family in Santa Clara, Calif.
“I found the Santa Clara market to be much more competitive than I thought it would be,” says Cheetsos. “Other buyers seemed to be looking for similar types of homes in the same community, making it very important to work with an agent who understood how to make the right offers. This was one of the most important milestones of my life, and I know the research I put into the process helped create the best outcome.”
Not only are these young homebuyers conducting extensive research about the residential real estate market, they are also looking to save money, some in surprising ways. Those surveyed expressed a willingness to make significant sacrifices in order to save for a home. These include limiting vacations (45 percent), taking a second job (40 percent) and even moving back home with Mom and Dad (23 percent).
Andy Asbury, broker and owner of Better Homes and Gardens Real Estate Area Leaders, based in Minneapolis, Minn., has been seeing similar trends in his market. “We have seen a trend of first-time homebuyers living with their parents beforehand to build up the necessary down payment. Many of our younger clients have also told us they chose to move back home because they had been paying top dollar for a rental apartment and were tired of spending a significant amount of money on a property that they recognized had no upside potential for them.”
Recognizing that buying a home is one of the biggest investments of their lives, these younger homebuyers aren’t limiting their research to available properties and house specs. Of those surveyed, interest rates (58 percent), home prices in a desired neighborhood (59 percent), and the ability to secure a loan (51 percent) are the top areas of research conducted before buying.
“Prior to purchasing our home, my wife and I were very mindful of what we could afford and what our actual mortgage payment was going to be,” said Daniel Sheahan, 32, a first-time homeowner who bought a new four-story home with a rooftop terrace through Better Homes and Gardens Real Estate Gary Greene in Houston, Texas. “We went into this process with a knowledge and understanding of the housing market and, more importantly, all of the surrounding financial requirements.”
“We are seeing that next-generation homebuyers have been cautiously watching the market and deciding that now is a good time to enter,” explains Chris. “In my experience, this generation prides itself on being thoroughly educated when making big decisions. They also have greater access to informational resources than their parents would have had available.”
David Cooper, president and CEO of Better Homes and Gardens Real Estate Kansas City Homes, noted that younger homebuyers are more acutely aware of their budgets than previous generations, and agents need to ensure they are working within their budget. This could mean strengthening negotiating skills or even sharpening the creative eye on fixer-upper properties to help buyers envision how they could transform a house to meet their budget and lifestyle needs. This translates into the delivery of a service level that is higher than ever before. Agents who meet this challenge will see the benefits.
“There is no question that the next generation of homebuyers in the Kansas City market is becoming more conscious about the financial responsibility of owning a home,” Cooper says. “They are more willing to sacrifice other expenditures, such as eating out or buying new clothing, to help save for this important life goal. We work with young homebuyers every day, and we are accustomed to helping younger and first-time homebuyers find the right house that fits their budget and lifestyle.”
And lifestyles are more diverse than ever.
“There is a new landscape of consumers coming on the market,” Chris says. “Our agents understand that no two consumers have the exact same needs, so they must be fluid and increasingly knowledgeable to adapt accordingly. Consumers know what they want; it’s the agent’s job to satisfy their needs in a personal and efficient way.”
