Real Estate and the Millennial Revolution
By: Kimberly Gomes
For the second year in a row Millennials make up the largest group of homebuyers in the United States, accounting for 32% of the market according to the National Association of Realtors. As the Bay Area economy thrives, many luxury Millennials are becoming strong contenders in the local market, prioritizing lifestyle over location with certain residential desires in mind.
It’s no secret that the Silicon Valley and San Francisco region harbor a vast amount of well-paid tech professionals with stock options proving profitable. According to real estate coach, Travis Robertson, the average luxury millennial has a $5 million net worth and a $200,000 annual income. With this equity comes an eager intention for real estate investments or a first home purchase.
Robertson notes 73% of Millennials are considering buying homes over the next 12 months. The average ‘pentamillionare’ who is 35 and under spent $7.8 million for a property, 80% of whom paid all cash. While a slim portion of Millennials earn more than 5 million a year, the Bay Area’s 75+ billionaires and hundreds of millionaires create a niche for potential Gen Y luxury homebuyers with large amount of capital.
“A strong job market in high tech has attracted a younger home buyer to the Bay Area. According to Zillow, 52% of people moving to the Bay Area over the last 12 months are Millennials,” says Bill Lewis, Vice President of Alain Pinel Realtors and Manager of the Los Altos office.
With Millennials comes specific desires. Urban environments and turnkey homes have become a primary focus. Millennials have more concerns about lifestyle than location, which makes sense given the new wave of employee-focused work environments they’re thriving in. Generation Y also prefers flexible working hours, cash bonuses, and employer training in their work life, according to Roberton’s data.
When it comes to home specifics luxury Millennials want safe rooms and automated systems. Home theaters, a pool, and 4+ car garages also rank among the top 10 preferred features, along with outdoor kitchens, open floor plans, and a personal gym. This generation of eco-conscious homebuyers also desires energy efficienct systems and bonus spaces for a wine cellar.
As the Bay Area’s technology industry continues to rise and thrive, the influence of Millennials’ in local real estate will likely rise with it, further strengthening the already hefty buyer pool.
“As Millennials establish their careers and start families their needs expand from rental markets to the home buying market, impacting values, especially in San Francisco and here on the Peninsula,” says Lewis.
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