Much has changed in the real estate market since the Great Recession, including who your primary buyer is when youâ€™re selling a home.
Itâ€™s important for you, the seller, to know who your new buyers are and what they want in a home. But with Gen X and Gen Y, itâ€™s as important you what they expect you not to do during the home selling process.Click to see today's rates (Oct 20th, 2017)
Most of your new buyers are under 55, andÂ they waited to buy.
Gen Y, aka Millennial home buyers, ranges between 25-34 years old, and many are just starting to enter the housing market. Theyâ€™ve delayed marriage, family, and home buying to pay off student debt and pursue careers that allow them to sustain a mortgage.
They make up the largest percentage of homebuyers in the market, at 42 percent.
Gen X home buyers, who are 35-54, are the largest percentage of current homeowners, but are also new entrants into the market buying first homes. Like their Gen Y children, theyâ€™ve been saddled with student loan and other debt they paid before buying.
Another contingent of Gen X-ers was forced by recessionary pressures to stay in houses longer than they expected. Theyâ€™re eager to sell their starter homes and move to new ones. Theyâ€™ve made up 28 percent of home buyers in 2017.
Both groups are more ethnically and racially diverse than their predecessors. For diverse Gen Y buyers, cultural values lead to more home-sharing, which influences their choices about size and features of homes theyâ€™re considering. But Gen X is buying multigenerational homes, too.
Unlike Gen Y, Gen X has far more responsibility. This is the â€śSandwich Generation,â€ť wedged between Millennials and Baby Boomers. Theyâ€™re the Jan Brady of generations.
By population, typical measurements say Gen X is the countryâ€™s smallest generation. But itâ€™s also now America's wealthiest. That wealth is consumed by all of those responsibilities, which come with more expenses than Gen Y has. That makes Gen X more cost-conscious and cautious when they buy.
Gen X parents often careÂ for younger adult Gen Y or minor Gen Z kids who live with them, as well as their Boomer or Traditionalist loved ones. While their older relatives may not live with them now, Gen X always knows they could any time.
Their bigger (and still growing) family meansÂ they need more house.
It also means they influence the adults in other generations about home buying decisions. Your Gen Y buyers may defer to their Gen X parents about their purchase. Similarly, they usually influence downsizing Boomer or Traditionalist home buying choices.
When theyâ€™re first-time buyers, both generations want larger first homes than their parents or grandparents bought, and are skipping starter homes. Gen Y buysÂ property costing an average of $217,000 with at least 1,800 square feet.
Both groups are willing to do home improvement projects. But they buy larger homes that may be fixers for different reasons.
Gen Y anticipates a larger larger salary, so these buyers believe they can start out with more home and grow into it physically and fiscally. Theyâ€™ll build or expand their families and live in the same home for at least a decade, they say.
But Gen X has a different challenge. Many rentÂ whileÂ paying off debt, or these people areÂ first-time homeowners. Theyâ€™ve established families and need space for them. Theyâ€™re driving the market by spending an average of $261,000 on homes that are 2,100 square feet or larger.
For both generations, living in an extended family might be the norm. For Gen Y, itâ€™s likely because they are from a culture where itâ€™s typical to haveÂ extended family living in one home.
Gen X-ers, with their care giving responsibilities, may have kids, parents, grandparents or grandchildren living in their homes. They need houses they can retrofit for everyoneâ€™s needs.
Both groups would consider buying a multifamily residential property and becoming landlords. For both, buying a home and doing home improvement projects to expand itsÂ size and functionality makes sense. Itâ€™s a better investment.
Well, actually, many will live in urban areas if they can afford housing there. But theyâ€™re being pushed out by relatively affluent Boomer retirees, who are selling their suburban homes and going urban. Competition is fierce. Priced out of the city, younger buyers are investing in suburban homes.
Suburbs have become more â€śuser-friendly,â€ť and have many of the amenities of urban environs. So, now, Gen Y is moving to suburbia, where 85 percent of Millennial buyers purchased homes in 2015. Among Gen X, 72 percent prefer suburbiaâ€™s communal environment and the single-family detached homes there.
There are multiple ways to make Gen X and Gen Y reject your house, and one of them is refusing to use technology to sell them. Most of both groups start online in the home search.
They do virtual tours of the homes in which theyâ€™re interested before scheduling to see them. If your home isnâ€™t available online, or doesnâ€™t have enough pictures and information in the listing, theyâ€™ll skip it for another.
Also, Gen X takes longest to decide on a house, so rushing or pressuring these buyers undermines your credibility. Since 29 percent of you sellers are 37-51 years old, you probably get that.
Be willing to go through the process thoughtfully with both generations, and expect lots of questions, especially from Gen Y.
Both generations expect honesty in home listings. Tell the truth about your homeâ€™s size, amenities, location details and flaws -- especially the flaws. You will anger them if they learn you werenâ€™t truthful with them before they came to see your home.
Finally, respect their cultural and generational differences. Donâ€™t make them feel uncomfortable about needing a multigenerational home and discussing home improvements or renovations as part of the deal. Donâ€™t refuse to listen to your real estate agent about how to make all buyers comfortable with your home.
These two generations have money to spend, but donâ€™t see it as money to burn. If you donâ€™t cater to their needs, theyâ€™ll buy from someone who will.
Today's mortgage rates have fallen to 2017 lows. This is great for home sellers because it expands the pool of buyers. It's also great for buyers, because they can afford more house.
Find your best mortgage rate by comparing quotes from several lenders. Current mortgage rates can change often, so obtain your quotes on the same day (the same hour would be even better!). That's not hard to do online.Click to see today's rates (Oct 20th, 2017)
The information contained on The Mortgage Reports website is for informational purposes only and is not an advertisement for products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, parent, or affiliates.
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2017 Conforming, FHA, & VA Loan Limits
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