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It might be time to stop treating millennials like the scrappy, up-and-coming generation. According to a recent report from the NAR, millennials now represent the country's largest share of homebuyers at 43%.
In some ways, this is the normal generational transference of power you see every couple of decades. But in other ways, millennials' ascendency is anything but ordinary.
Millennial real estate consumers bring with them a whole new set of habits, expectations and modes of operation. They want their transactions to be convenient, their processes transparent, and their practitioners accountable. Above all else, they want choice. And, true to form, millennials are turning to technology to satisfy their expectations.
This article looks at three recent headlines that help explain how millennials are leveraging technology to invest in real estate.
Shopping at the Digital Marketplace
Recently, the Financial Post ran an article entitled 'The Uber of real estate is coming and once again, it's millennials who are behind the disruption.' In it, they profile Nobul, a real estate digital marketplace that matches consumers to suitable real estate agents, and then has agents bid for a consumer's business with attractive commission rates, offers, etc. The business model combines everything millennials like in a transactional relationship: choice, transparency, convenience and cost savings.
According to Nobul founder and CEO Regan McGee, this was no accident. 'Most of the people coming to our platform are millennials,' McGee told the Globe and Mail. 'They don't have a relationship with some real estate agent who got their licence back in the seventies.'
New Kids on the Blockchain
In May, Entrepreneur published the article, 'Blockchain Technology is Revolutionizing the Real Estate Industry," detailing the rise of "fractional ownership" and tokenization in real estate. The following month, LA Magazine published 'Crypto Maniacs: How Cash-Poor L.A. Millennials Are Buying Million Dollar Homes.'
You'd be forgiven for not knowing what any of those words mean. Essentially, fractional ownership and tokenization are newly minted terms for investing small amounts into real estate. Instead of collecting a sizeable down payment and paying a long mortgage, millennial investors can buy a 'fraction' of a property instead, much like a traditional investor buys a share in a company. These tokenized transactions take place over blockchain, a secure, unalterable digital ledger that facilitates fast transactions.
Seeing Properties Sight-Unseen
Finally, you can refer to this article from the National Association of Realtors: 'Millennials Willing to Blow Budgets, Buy 'Sight Unseen.'"
The article explores the recent trend in millennial real estate consumerism of buying remotely. But if you look closer, you'll see that technology has its hands in this trend as well. Millennials aren't actually buying sight-unseen - at least not the way older generations think of it. Instead, they're leveraging advances in immersive technologies like virtual and augmented reality to view properties remotely, allowing them the flexibility to view several homes before they buy. Again, it boils down to what millennial consumers value in a transaction: convenience, choice and tech-enabled solutions.
As these recent headlines illustrate, millennials are willing to think creatively in their approach to real estate, leveraging innovative technologies that align with their values and expectations.