Even if you are only peripherally involved in real estate, home loans or finance, you know the millennials are a “problem.” Specifically, those born from 1981 to 1997 are not buying houses at a rate their parents and grandparents did, and that’s messing up … well … seemingly everything.
First, some documentation to somewhat show the “mess.” THEN I’ll offer my brilliant solutions (yes, of course I am joking … I hope).
From Nerd Wallet, “Millennials and Homebuying: Myths and Reality” is chock full of stats that prove:
“Our research showed that a majority of millennials would prefer owning to renting, but they appear to be postponing homeownership because of real and perceived difficulties in affording it.”
From the Washington Post, “For millennials ready to buy a home, the pickings are slim” … okay, that’s currently true for everyone.
“… Just as they’re finally ready to buy, the housing market has the fewest homes available for sale on record. And those that are for sale are increasingly priced at values inaccessible to first-time buyers.
As a result, the housing market is booming for those with cash to spare — but not for millennials looking to own their first home.”
From The Wall Street Journal, “Percentage of Young Americans Living With Parents Rises to 75-Year High.” One would assume that’s because of student debt and the lack of affordable housing etc. Surely, that’s part of it.
To attempt to get a better explanation for this, I actually spoke with three millennials who live with their parents – Petey, Kara, and Sal. Here’s what I learned.
Petey likes his mom and dad and his extended family, loves his mom’s cooking, and has no desire to move out of his parent’s home. He also has no plans to get married or have children. When he dates, he “makes accommodations” for those times he wants to spend all night with his choice.
Kara’s mom is divorced. Kara is convinced her mom was lonely and really wanted her to move back in with her after college. So she did. When Kara started dating Roger, her mom put a small addition on the house. Now, Kara and her mom mainly share the kitchen only. Roger has moved into Kara’s “part” of the house and the three appear to be perfectly happy with the choice.
Sal relocated into his parent’s basement with his college girlfriend, Toni. Both Sal and Toni have excellent jobs and no student debt. But they like the state of “no debt” and want it to continue. They bank a large percent of their combined income to save for their future house – but not for the down payment. They plan to buy a house for cash. Wow. I remember how excited I was when my parents gave me $2000 towards the down payment on my first home purchase. Hmmm …
How to Motivate Millennials to Buy
I recall a quote in a recruiting class that had to do with pain versus gain. In other words, the instructor opined that in order to attract a recruit, you needed to either promise ways to alleviate his/her pain, or ways to effect positive gain.
Let’s summarize: millennials want to buy houses but they are saddled with student loan debt (pain), unable to find affordable homes in markets they choose to work in so they can repay that debt (pain), may not have sufficient money for a down payment or cash purchase (tee hee – pain), or see no reason to leave mom and dad or mom or dad or Aunt Mame or Grandad and cook their own meals, do their laundry, pay rent or a mortgage, etc. (pain).
How can we supply ways to remove the pain or supply the gain? Let’s dig deeper.
I asked Petey, Kara and Sal loads of questions, especially ones I hoped would get to the pain/gain aspect of their lives. Soon, the pain became apparent (no pun intended). Get a hint of it from YPULSE:
“More than half of Millennials believe that technology positively effects their happiness …”.
But there is at least one down side to technology – it is often expensive!
“According to Pew Research, 95% of Americans ages 18-34 own a cellphone and 70% own a laptop. Among that contingent of cellphone owners, 63% say they use their phone to access the Internet, while 52% report that they send and receive emails via mobile.
Twenty-somethings are attached to more devices than just their cellphones and laptops, however. Today, they're also streaming movies on their tablets, using their smartwatches to make reservations and tracking their diets via bracelets.”
Mashable then goes on to list 20 gadgets every millennial should have. Make a note, there are nearly as many of these lists as there are millennials.
So how do we jump start the housing and real estate market by motivating millennials to buy homes by the droves (or by the ocean, mountain or lake)? Here it is – First and foremost, get the TECH COMPANIES involved! “How,” you say? Let these companies hire the millennial or pay for the use of their home. That payment can be made in advance and serve as the down payment or pay for closing costs or, who knows, allow the millennial to pay cash for the new home! The possibilities are endless.
Technology as the Solution
1. Let’s have Apple pay a millennial’s down payment for agreeing to advertise the latest iPhone on the front of their new home and via electronic lawn signs! Not only will this have an immediate and positive impact on housing, it will create jobs and foster a sense of community -- when the neighbors insist on new legislation from their just-hired community “technology wardens” determining times the display can be lit, what colors may or may not be included, whether or not sound is attached or it must be silent … Brilliant!
2. Next, I am certain Samsung seeks a way to raise its reputation. How about if they pay for millennials fire insurance policy and then throw in home owners, flood and even mortgage insurance itself! In return, the millennials will safely serve as Beta Testers for all of their new products!
3. We’ve all heard that Amazon will be delivering more packages via drone to a market near you. Why not pay millennials to be Drone Directors? They can have electronic grids and maps superimposed on their roofs and Amazon can use these roofs as additional points of reference to track wayward drones. Simultaneously, Amazon can have its logo digitally painted on these roofs and that will serve as even more revenue-generating advertising, especially if the millennial purchases a home near an airport!
4. Hulu or Netflix can pay the millennial homeowners to be “demo stations.” They can partner, excuse me – “co-brand” -- with LG or Vizio and have their homes serve as the old drive-in movie theaters (so, okay, they’ll need large garage doors). Interested neighbors can purchase a new ginormous TV on the spot and the new millennial homeowners will earn commission without even leaving their property! Neighborhood entrepreneurs can sell popcorn and sodas in special “logo-wear” that adds further value to the millennial’s sponsor(s)!
I’m sure you are catching the drift here. And, we have collectively solved the issues of lack of down payments, wanting to live near major metropolitan markets, and general millennial income and affordability! Now, what to do about missing mom or dad or mom and dad or uncle Harry?
Hologram Grandmas (and More!)
Clearly (pun intended) Google Play, Facetime, Skype, What’sApp or any other similar “I can see you!” app can design a process for automatic and consistent interactive visualization of the missing party in whatever room is applicable. There’s mom in the kitchen, 6 AM – 8 PM daily. Dad’s working in the garage every evening. Uncle Harry is glued to the Dodgers whenever they’re on TV. Easy!
But why stop there? Why not cater to the agoraphobics among us or those close to becoming one and use this technology to have digital parties, teach and take digital classes, go mall shopping digitally, and on and on – all courtesy of the “sponsor!”
Or how about just creating holograms of our beloved family members or friends? This may happen sooner than you think. Read what singularityhub.com says in, “Holograms Aren’t the Stuff of Science Fiction Anymore:”
“A study published online in Nature Photonics by a team of researchers in Korea has developed a 3D holographic display that they write performs more than 2,600 times better than existing technologies. Meanwhile, researchers led by a team in Australia claimed in the journal Optica to have invented a miniature device that creates the highest-quality holographic images to date. The papers were published within three days of each other last month.”
Next, how do we address the tasks that are automatically done for millennials who live at home? That’s even easier! I live in the netherworld – woods, cows, lakes, 2 lane roads – and even MY dry cleaner does laundry, picks up and delivers. So, would it be so hard for the millennial home buyer to don a patch on every clothing item that advertises that dry cleaner? Is it too much to ask millennials to wear that Bubbles Dry Cleaners hat to every social or work occasion? Wouldn’t Green Apple Cleaners be thrilled to supply tee shirts, hoodies, and sunglasses that flashed their name and store hours? Much of this is already being done. It just needs to be organized and geared towards home buying.
We’re still missing the home cooked meals. Forget fast food, think of the exploding Meal Kit Delivery Services business. Here they are ranked by Forbes magazine last March! But how do we get them to assist millennials in buying (and presumably staying in) a home?
Picture this … a Realtor hosts an Open House. HelloFresh sends the food which the Realtor prepares in minutes and also provides logo material and streaming videos that are all over the house. Then, Hello Fresh hosts a raffle for attendees and gives away – you name it – 100 free meals, a year’s worth of lunch, to 50 millennials, a $2000 coupon towards meals or closing costs (okay, joking again). The “condition” could be that only income-qualified millennials (or their parents, ha) can attend … or something like that. This could be YUGE!
Now that I’ve solved a major housing issue, as only I can (there’s that joking again), what do YOU think? What ideas do you have about getting more millennials into more homes and as soon as possible? Because remember this housing anecdote – every new home sold directly affects at least 11 other jobs. New homes built affect plumbers, carpenters, landscapers, etc. Previously occupied homes affect painters, movers, inspectors, etc. Let’s get the economy growing in a big millennial way!
That last tagline is courtesy of The Croyance Group who has been paid a promotional fee for this blog. 😊