Zillow Digs’ comprehensive research among 13,000 home buyers, sellers, owners, and renters for its Zillow Group Report on Consumer Housing Trends points out the differences between how Millennials handle homeownership versus previous generations.
You might notice that the demographic of the homebuyers coming into your lighting showroom is changing — and that means you need to alter your sales approach and customer service.
The Zillow Group Report on Consumer Housing Trends reveals that half of the current home buyers in the U.S. are under age 36, which means a new generation – Millennials – is shaping the future of real estate. Despite demographic reports about young adults’ urban lifestyles, Millennials share their parents’ aspirations for a single-family home, often in the suburbs…eventually.
While they are delaying buying a home later than the generations before them, Millennials perform far more social (Internet) home searches and seek input from friends, relatives, and neighbors roughly 58 percent of the time, versus the Silent Generation (the 50 million people born between 1925 and 1945), who poll friends 37 percent of the time.
Many Millennials (26 percent) even choose their real estate agent online or through personal referral (33 percent). Just as Millennials tend to scrutinize their purchases more than generations before them, they take the same cautious approach when selecting a real estate agent, asking friends and family about their experiences and reading online reviews. Overall, they are looking to do business with people they deem trustworthy and responsive to their needs.
While older generations rely on real estate agents for information and expertise, Millennials expect real estate agents to become trusted advisers and strategic partners. In fact, the process of finding or selling a home is much more collaborative for Millennials. They bring all available tools to the process, including their smartphones, social media platforms, and online networks. And while only 9 percent of all homeowners are Hispanic, nearly 15 percent of the Millennials buying homes are Hispanic, which reflects the changing demographics of the American middle class.
Millennials (ages 18-34) comprise 42 percent of all home buyers today, while an additional 31 percent of buyers are members of Generation X (ages 35-49). Baby Boomers (ages 50-64) and the Silent Generation (ages 65-75) together make up the smallest share of home buyers (26 percent), with only 10 percent of buyers over age 64.
Once they’ve taken the plunge and purchased their homes, it’s time to renovate. More than half of all homeowners interviewed purchased a property that needed updates, with most (45 percent) indicating that only some updating was necessary, and a minority (7 percent) were facing a complete overhaul. Approximately 18 percent purchased a place that had been recently remodeled.
When it comes to ongoing home improvements, the average homeowner has made 6.7 improvements to their home. The most common included painting interior rooms, replacing appliances, getting new carpet or flooring, and landscaping the yard. Large improvements generally included a bathroom overhaul (30 percent), kitchen overhaul (22 percent), modifying the existing floor plan (16 percent) and finishing the basement (13 percent). Owners aged 65-75 are more likely to have completed a bathroom or kitchen overhaul (36 percent and 28 percent, respectively), whereas Millennials are slightly more likely to have finished their basement (16 percent).
The majority (66 percent) of homeowners interviewed said they choose to make improvements primarily to express their personal style, with fewer than 1 in 10 (9 percent) making improvements to bolster resale. Among the style improvements are interior and exterior painting, flooring replacement, minor kitchen and bathroom upgrades, and general redecorating. Millennials, in particular, show a higher interest (78 percent) in making upgrades to enhance their personal expression and to increase the home’s energy efficiency.
When it comes to renovating a home, men and women differ on the types of projects they’re most likely to tackle. Men show a higher preference for major and minor kitchen improvements and finishing basements. Women show a higher preference for interior redecorating, minor bathroom remodeling, and replacing appliances.
Most homeowners (55 percent) rely on a contractor or professional when planning and making home improvements, but they also seek advice from family, friends, and neighbors (52 percent) plus conduct research via online resources (49 percent). Roughly 70 percent of those surveyed say they use local home improvement retailers in some way.
Nearly one-third (32 percent) of the Millennial owners typically amassed information from more than five resources. The majority went online (71 percent) or to home improvement stores (69 percent), and 64 percent gathered information from friends and family or watched videos (61 percent). Generation Xers and Baby Boomers were the ones who most often turn to home improvement retailers (73 and 72 percent, respectively) as a source of information.
Millennials show a willingness to use a mix of do-it-yourself approaches plus seek out professional help. They are the most willing to use a combined approach for projects like minor kitchen remodeling (26 percent) or to complete all the work in that improvement category themselves (49 percent).
Generation X owners enjoy doing light work such as interior decorating (79 percent), but tend to hire professionals for large-footprint projects such as kitchen overhauls (49 percent) and basement build-outs (47 percent). Meanwhile Baby Boomers are happy to tackle light DIY projects outdoors, such as landscaping (69 percent) and curb appeal improvements (75 percent). Indoors, they’re willing to replace appliances (52 percent) or manage bathroom upgrade projects (63 percent).
Not surprisingly (due to age), members of the Silent Generation are more inclined to hire professionals and contractors for improvement projects.
Millennials are the “handyman” generation and are quick to DIY major projects rather than pay laborers. In all, 69 percent of Millennials surveyed indicated that when projects need to be done around the home, they prefer to do them directly as opposed to relying on professionals. Among the different generations, they show the highest willingness to tackle appliance installation (65 percent), the installation of new carpet or flooring (34 percent), or update plumbing (33 percent).
Since they are young and ambitious, many Millennials feel confident taking home improvement matters into their own hands. Despite their inexperience, 3 out of 4 Millennials (74 percent) report that they came in at or below their DIY project budget, which is about on par with other generations. Additionally, a larger share of Millennials live in urban areas (33 percent), where DIY may be the more affordable option.
The typical homeowner has plans to do at least three maintenance projects over the next three years, with common plans including painting (44 percent), upgrading flooring (31 percent), and updating kitchens (26 percent). Ambitious Millennials and families are the most likely to have five or more projects in the pipeline (both 27 percent), while members of the Silent Generation are most likely to have none (23 percent).
Becoming aware of the different ways various demographics remodel and what they are seeking in home buying will help a lighting showroom’s sales team better serve customers of all ages who come into their store seeking guidance.