Millennials are never, ever going to buy homes. If there is one thing the conventional wisdom is sure about – it is that. Why millennials are never going to buy homes is more of a jump ball. Maybe its the avocado toast, or the crushing student debt, or the desire to live in hip urban apartments, or the pure love of sharing a home with their parents for a long, long time — or a fear of the housing market engendered by the Great Recession. The proffered answers have been myriad over the last several years.
And there are just two tiny flies in the ointment when it comes to this particular piece of conventional wisdom. The first overlooks what seems to be pretty developed desire to buy real estate among the generation of consumers whose births rounded out the last two decades of the 21st century. According to the National Federation of Retailers, 81 percent of millennials report at least aspiring to homeowners as hip, even if they aren’t there yet.
The other fly in the ointment is that, as millennials age, they seem to be buying homes. They are buying them a bit older than their parents and Gen X siblings did — but they are also buying them more expensively, often skipping the starter home phase entirely and jumping right to the crown molding/marble countertops phase of property ownership.
And so, enter Zillow, who wants to make the road to homeownership easier — and hopefully more common— for those millennial homebuyers.
Which leads us to the launch of RealEstate.com – the newest tool in Zillow’s arsenal aimed at luring more millennials into the home-buying process, by taking some of the mystery out of the event. Because, while housing costs are concrete – they manage to be intimidating without being informative – buyers aren’t really paying $300K for a new house in real dollars – they are borrowing 80 percent to 97 percent of that amount. This, of course, means that the relevant figures for a first time buyer are around bringing that loan to fruition (and then being able to pay on it for the next 15-30 years).
“A first time homebuyer isn’t really contemplating a $300,000 to $500,000 a house,” Zillow CMO Jeremy Wacksman noted “They think about $3,000 a month, because by the month is how they are paying for their housing right now.”
And so RealEstate.com, among other innovations geared at better serving the needs of new buyers – lets users guide their searches in terms of monthly costs.
And not just the direct costs of housing per month – mortgage, taxes, homeowners insurance, etc. – Zillow’s All-In Monthly Pricing tries to put up-front an entire financial snapshot for the buyer considering a purchase. That picture tries to include information like estimated utility costs, HOA fees and a rundown of closing costs, in full.
“Affordable is not a concrete concept – and we are trying to help users be able to fully flesh-out a picture of what they can afford and where they can live. Buyers should have a chance to make that choice with as much data as possible.”
With more than half of the new buyers to the market coming from the millennial generation – Zillow has long been looking to expand its brand and offer a better-tailored experience. The RealEstate.com domain name comes care of Zillow’s acquisition of Trulia in 2015.
Apart from better keying into the data millennials want – the site is also visually formatted to be familiar to a regular Pinterest user and designed to offer various educational content consumption opportunities in tandem with the ability to search real estate listing. Those educational materials include first time buyers guides – and they are viewable (and searchable) in English, Spanish and Chinese.
Other languages will be added going forward, Wacksman noted.
So, will millennials be movable into the housing market after all? Zillow is bullish on a yes answer to that question – but then, one might expect that they would be. But, it’s also worth noting that, even as millennials are entering the market after all – they are still thinking very differently than their older counterparts did about the buy itself.
“It used to be that first-time home buyers bought a cheap home and maybe traded out of it three or four years later,” Wacksman said. “And now they’re waiting longer, partially because of affordability, and then they’re thinking about it, like, ‘OK, I better find a place that could last me a while.’”
As it turns out – the generation most often dinged for being mercurial is, in many ways, the generation that also values stability. Data, according to Zillow, adds stability. The question now is: will it had enough to bring more millennials to the real estate closing table?