Did you know that about 32 percent of homebuyers in the U.S. are millennials? This may seem like a surprising statistic, because it’s widely known that millennials actually prefer to rent rather than buy. Because millennials are actually the largest portion of the market of home-buyers, and are now rivaling older generations as the largest sector of working Americans, their lifestyle preferences are transforming real estate in strange new ways. Here are three interesting ways millennials are reshaping real estate:
Housing and Rentals – Millennials Prefer to Share
Millennials prefer sharing and renting furniture over buying property. Why? They want to live in costlier urban areas; they wait to commit to buying large items like homes and business premises; they like the ability to be spontaneous and move as they like; they prefer experiential living and travel, and they like a landlord to cover maintenance issues.
How does this affect real estate? Millennials don’t even want to buy furniture; they are unlikely to buy property. With vast student loan debt, and increasingly delayed life milestones, many millennials feel that investing in property seems remote or unrealistic. Therefore, millennials need easier routes into ownership, and ways to monetize their investments when they move away or decide to travel. Businesses like Airbnb have transformed the apartment rental industry, but they are also enabling millennials to own properties, their way.
Offices – Minimalism and Technology are Key
Many millennials prefer the smaller, more efficient spaces suggested by the ideals of minimalist living, and they have traded material possessions for the flexibility that comes along with it. Millennials are more likely to want to work in office spaces that offer tasteful, minimalist décor and amenities, putting the pressure on companies, and therefore landlords, to comply. Spaces should also be eco-friendly and energy-efficient in order to earn an A+ from millennials.
This is causing a higher demand for smaller, more efficient floor plans, and rental options for everything from furniture to art. Millennials prefer environmentally-friendly and multi-functional spaces, so these benefits are being upgraded for and advertised.
Millennials also love technology and can’t imagine doing even ordinary, everyday tasks without it. This means they search online for everything, including a place to live and work. Companies and landlords need their rentals to live up to the high standards of millennials in order to attract younger tenants, and this means their spaces must be optimized with the latest and greatest technology. A strong social media presence is also essential for marketing office spaces and rentals to millennials, as companies without these assets could be considered “behind the times.”
Hotels – A Thing of the Past?
Millennial preferences are even changing the way hotels strive to appeal to the younger generation. Experiential stays and more customized visits are becoming the norm, and many chains are even lowering prices to attempt to compete with the affordable options proffered by Airbnb and other vacation rental competitors.
The Bottom Line
It’s going to be exciting to see how millennials change the real estate industry over time. As they gain purchasing power and the market changes, real estate will follow. Will millennial preferences for renting, minimalism, and environmentally-friendly options persist as the generation ages?