The Triangle housing market shows no signs of slowing down in 2022, yet one of the biggest changes from the previous two years will come from a new demographic of home buyers: millennials.
This group has been slow to enter the housing market, but everything is about to change because of them. Millennials who are entering the home-buying market are skipping the traditional starter home and instead purchasing high-end, luxury homes that better meet their demands.
A recent study from the Wall Street Journal and Realtor.com shows the Triangle market will be an emerging housing market in 2022. As high-tech jobs opportunities continue to create a draw to the area, millennials will be making their mark across Raleigh-Durham.
Here are two key drivers that explain how millennials will begin purchasing homes across the Triangle.
Millennials finally have financial stability
Millennials were born between 1981 and 1996, but many struggled after college due to the great recession of 2008. However, elder millennials are now entering their 40’s, and as they and even their younger millennial counterparts are paying off the student debt, home ownership is more of a reality. What’s more, this age demographic is now well into careers, which means their earning potentials are at a high. A study from the Brookings Institute shows millennials tend to be more educated than previous generations, leading to higher-paying, more incentivized employment than older generations.
Because of the pandemic shutdowns, they were also spending less, which means they were able to save more. Costs likes gym memberships, dining out, and even daycare and student loan expenses were paused or stopped completely, allowing them to build up emergency savings, pay off credit card debt, and even invest in their futures.
In short, the recession and pandemic led them to make sound financial decisions for their future, and it’s paying off.
Millennials believe the right home is worth the wait
Millennials waited so long to join the home-buying market, they don’t want to settle for anything less than the perfect home. As the pandemic changed what people were looking for in a home, this demographic is driving the current trends in homebuilding.
Millennials are choosing luxury homes that are fully loaded with amenities. As businesses continue to operate with remote and hybrid work scenarios, millennials are trading proximity to the office for larger homes in smaller communities throughout the Triangle. They want more space for their growing families, as well as more flexible spaces and outdoor entertainment. Because the pandemic forced them to trade in their extracurricular activities to enjoy life at home, they’re more willing to invest in the larger homes and properties that keep that lifestyle going. At-home gyms, recreation rooms, swimming pools, and massive kitchens are the amenities they want.
They’re also more environmentally conscious, which means they want more than Energy Star certified products alone. They’re looking for ways to minimize their carbon footprint, and when they’re staying at home, that means they’re willing to invest in the tools that will help make a real difference. For example, this demographic has grown up connected to technology, which means the connectivity offered from the Internet of Things will be important to their home buying considerations.
Smart home automation systems will ensure everything from home surveillance systems to door locks to smoke detectors to the temperature of a room will be readily accessible from every device. These home automation systems can not only drastically reduce costs within a home, but they can create a more efficient home that reduces energy use as well. Locally sourced building products, solar panels, and green certifications will go a long way in attracting the millennial market.
The Triangle MLS reports the average sales price for homes in 2021 was nearly $400,000, which was up over 17 percent from 2020. As more millennials begin purchasing in 2022, expect that average home rate to increase significantly within their demographic, and for them to be willing to pay the price to get the spacious, eco-friendly home that matches their post-pandemic way of living.
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