THE MILLENNIAL MIND

What has changed?

BY CARSON ARTHUR

Every year, I closely track the housing numbers and what is happening across the country. I love all of the stats associated with buyers and what they are looking for so that I can stay ahead of the trends and help my customers improve the value of their homes. I’ve always believed that even if a client is not planning on selling today, making smart upgrades to the front and back yards produces long-term dividends when it comes to the home’s value. What I couldn’t predict was the colossal impact that this new generation of buyers will have on these outdoor spaces and how they want to use them.

The numbers continue to roll in regarding the size of the millennial population. Many online sources put this group at (up to) 25 percent of the country’s entire inhabitants. That is a massive demographic when it comes to marketplace impact. Between 20 and 35-years-old, these buyers are just now starting to search for their first homes, much later than other demographics. The average millennial is looking to buy at around age 30, in part to high real estate costs and even higher student-loan debt, according to the National Association of Realtors.

Millennials accounted for 35 percent of North American home sales in 2017, with the number growing in 2018… potentially all the way up to 50 percent in 2019. The key factor; over 90 percent of this group considers owning a home an immediate priority (CNBC). No longer satisfied with condos and small footprints, this group is starting to pair off, find significant others and have babies.

So, what do millennials want in a house? Surprisingly, “location” has dropped in the priority list according to Century21 Canada. Instead, millennials continue to choose “more space” over “proximity to work”. Ideal homes for millennials have great character. They are drawn to good curb appeal, with houses that have front yards that set them apart in suburban neighbourhoods. They shy away from houses that all look the same because of their need to share their lives with their social groups. Having a home that is visually appealing is very important to them. The character of the home, specifically that first impression has never been so crucial to home sales. Millennials admit to looking at homes using online sources like Google Maps to preview the look of a house to help decide if they even want to entertain a viewing. This first impression of a home is made in 11-15 seconds and drastically affects the perceived value and desirability of a home.

The big surprise this year is the continued downward trend of kitchen and bathroom renovations. For years, homeowners looking to sell for top dollar would invest in mid-level kitchen and bathroom makeovers to prep their homes for the housing market. According to the numbers for 2018, these renovations have dropped when it comes to their return on investment. This ROI is determined by the amount of money spent on the renovation and the perceived market increase of the home’s value. Basically, if you spend $15,000 on a kitchen upgrade, you can expect to get back an average of 81.1 percent (or $12,150) if you sell within five years of the renovation. This number drops drastically as the budget gets higher. A major renovation of more than $125,000 will only get you a return of $63,750. Bathrooms are coming in a little higher with an average return of 70.1 percent.

So, why the shift in values? A lot of this has to do with the buyers and specifically, the millennials who now, according to Realtor.com, represent 35 percent of the housing market. Many millennials are just as happy with a finished home as they are with one that needs to be completely gutted and remodeled. We are seeing an increase in DIY and How-To videos on home renovations, painting kitchen cabinets and even simple things like hanging wallpaper.

So, what do millennials want? When it comes to the backyard, millennials have embraced gardening like none before! Young homeowners are choosing wholesome hobbies like knitting, canning and even urban-farming as a movement away from tech-related endeavours. When asked, this generation wants to ensure that their children have hands-on experiences in growing their own food or making their own clothes.

This focus on providing experiences for their children in the outdoors is going to dictate a lot of the design decisions for backyard spaces. Smart landscape companies will start brushing up on building play-structures, raised vegetable gardens, and wild flower meadows for bees. ~