August 11 2015
Brokerages are currently being challenged in their efforts to capture a commanding share of what some in the industry are trying hard to classify as a "Millennial land rush." The fact of the matter may be that the current situation may not constitute a land rush at all, but rather a generation playing out its unique developmental destiny.
The industry's conference and literature environments are currently awash with presentations and articles about the consumer behaviors of the 80 million Americans between the age of 18 and 34 that comprise what is generally known as the Millennial generation. While much of the information that is being shared is simply a rehash of extremely limited professional and previous offerings, there is one new publication that meets everyone's five star test of relevancy, accuracy and power.
Last week, the Pew Research Center, a unit of the Pew Charitable Trusts, issued what is probably, at this point in time, the definitive report regarding the Millennial Generation and their current interactions with the housing industry.
The Pew Charitable Trust is an independent non-profit, non-governmental organization (NGO), founded in 1948. With over $5 billion in assets, its stated mission is to "serve the public interest by improving public policy, informing the public, and stimulating civic life." It is, by any criterion, an amazing fountain of knowledge that matters.
The Pew report is entitled More Millennials Living With Family Despite Improved Job Market. The report contains a revealing analysis of U.S. Census Bureau data regarding this increasingly important demographic. For real estate professionals seeking to effectively work with this group, the following insights will be essential.
The relevance of the information presented in the Pew report is something that every real estate professional should study and apply to their own unique business. They should be aware of the stereotypes and generalities that are currently being peddled as contemporary marketing savvy. Many are nothing more than short-term observations that their authors are attempting to convert into long-term marketing wisdom.
What the Pew report was not charged with, and did not comment on, are the vast number of philosophical, lifestyle and cultural factors that are now formatting the lives of the 18 to 34 year old set. The factors that are contributing to the hesitancy of Millennials to engage in certain housing decisions (e.g. purchase) are complex and significant. They go well beyond how agents are interacting, what they are saying and how they are presenting the issues connected to owning one's own home. They are not all about economics.
Perhaps the most significant of these factors is that many were raised by the most complex of all generations, the "Boomers." Only history will disclose the full impact and force of having Boomer parents. Boomers themselves demonstrated the impact of having "civic" generation parents. Most couldn't escape that oppressive environment fast enough. The Millennials are demonstrating just the opposite behavior. The basis of this attraction and relationship may well be the foundation of the real estate industry's challenge with this demographic.
It is becoming increasingly obvious (supported by the Pew Report) that the impact of the recession on the Millennial generation may be far less than previously assumed. A strong case can be made to support the idea that what is happening relative to this generation and its housing decisions may well be a product of the culture in which they were raised. Consider the fact that nearly 50% of Millennials who have purchased a residence received significant funding support from their families. What expectations will these actions by Boomer parents carry into the future? Given the economic realities of upcoming retirements, is it possible that Boomer parents will demand repayment of these grants at the very moment that Millennials are feeling the heaviest burdens of raising families?
It is way too early and there has been far too little history connected to Millennials for real estate professionals to believe that a dependable set of Millennial-centric rules and procedures have emerged. Caution is the key here. Do some homework and closely track emerging research, such as that recently contributed by the Pew organization.
To view the original article, visit the RECON Intelligence Services blog.