What Millennial Homebuyers Care About Most: New Appliances
Posted By Marisa Sanfilippo on February 13, 2017 at 7:28 pm
Business Insider predicts: a wave of millennial home buying is coming. Forbes writes: Millennial homebuyers are better at home buying than their predecessors. As the current largest generation in the housing market, millennials are keeping the dream alive, according to TD Bank.
As you can see above, the millennial home buying market is creating a buzz, coming on the heels of statements last year that student loan debt was delaying millennials from home buying and other life decisions.
Northshore Fireplace, in collaboration with James DeMarco, real estate agent at Berkshire Hathaway, recently fueled the discussion further. Northshore and DeMarco recently surveyed 1,000 millennials, representing all 50 states, on the features they’d spend extra for when buying a home.
Each respondent was given $300,000 worth of play money for upgrades to a basic American home. The upgrades fell into 38 categories, and respondents could mix and match until they hit their spending limit.
The upgrades favored by millennial homebuyers
The full results of the survey can be found in an infographic produced by Northshore. But the short version is as follows: New appliances generated the highest amount of interest followed by a large master bedroom, two-car garage, solar panels/energy storage, luxury kitchen, solid hardwood/stone flooring, a finished basement, and smart home system.
“I was surprised millennials still desire a large master bedroom. What I’ve found is people in urban areas value smaller updated spaces more than larger, more ‘dated’ spaces. Maybe this hasn’t yet spread to a majority of millennials,” DeMarco says.
Louisville, KY-resident Katie Harris, 26, bought a house last summer with her husband and says her rent was only around $50 less than their mortgage payment without any equity benefits. “Mainly, we wanted a house with space for friends and family to visit, so the finished basement and large covered deck were huge selling points.”
While some millennials who took the survey also said a top school district was important to them, Harris and her husband didn’t focus too much on that aspect but were aware that the assigned home high school is not where they want their future children to attend. “We’ll likely move once we have a couple of kids and they get further into their schooling since the local elementary school is rated well,” she says.
Why millennial homebuyers respond this way
Mortgage professional Nick West of NJ Lenders has gotten to know millennial homebuyers well. In response to the survey, he believes new appliances are important to millennials because they do not have the time or desire to deal with breakdowns. In relation to what the survey notes about a finished basement being a priority over their children’s education, West believes, “Yes they want a finished basement, but the reason they are not concerned about the school system is that they are planning on private schools or home schooling options for their children.”
With limited funds to spend at the time of purchase, its one thing to desire certain elements in a home and another to be able to have them, as was the case with homebuyer Ramon Khan of Houston, TX. His top choices per the survey were: recently constructed, top neighborhood, above average school district, and luxury kitchen.
“Recently constructed was at the top of my list, but to get a new home in an established part of town is not always feasible. So while important, it’s not a deal breaker but something I will try to negotiate on my next purchase,” he says.
Khan also explained that good looks can be misleading and advises fellow millennial homebuyers to take his realtor’s suggestion. “We learned from our realtor that good looks are not always what they seem. We almost closed on a home that seemed perfect and in a beautiful neighborhood that we visited during the day.”
But then he posed a simple question: “I asked my realtor, ‘If I was your son, what advice would you give me before signing this contract.’ He responded, ‘Come back at night and if you still see what you like, then sign. I did not understand what he meant at the moment but when we drove back and saw all the parties, stacked cars in driveways and noisy neighbors, I was so glad he saved us from making such a huge mistake.”
Khan also notes, “Some young buyers might not think about the importance of [purchasing in a town that has a good school district] when buying a home, but we had children when we purchased. Regardless if you have kids or not, the value of your home is more secured when you are around good school districts, plus it makes it easier to sell.”
As prospective millennial homebuyers dive into their search, creating a must-have list is important, as is acknowledging that there are essentials and then there are want-to-haves. Where do new appliances fall in that division? That’s up to the individual buyer.