The two types of homebuyers in 2018
If you thought “liars and really-good-liars” when you read that, think again.
According to NAR, the typical homebuyer is 45 years of age, married and earns a median household income of $88,800. That means these buyers are members of Gen X, despite all the hoopla about millennial homebuyers (age 23 to 41 in 2018).
These Gen X buyers (those between the ages of 39 and 53) are the group that will also spend the most money on homes, according to the NAR. Look for them to “buy the largest homes in median square footage and bedrooms,” as well. These folks will be hot prospects as 2018 homebuyers.
The report concludes that this group of buyers want neighborhoods close to their work and near quality schools.
Baby Boomers (age 54 to 72) are the third largest group of buyers, behind Generation X, according to NAR. Be aware, however, that they split the generation in two, for some reason.
When looked at in total, Baby Boomers comprise 30 percent of homebuyers – only 4 percent fewer than millennials
And, what are they looking for in their next home? They’ll be looking to move closer to grandchildren, first.
Then, they want “a multi-car garage with plenty of storage,” according to Del Webb’s Baby Boomer Survey.
They also crave bodies of water, be they lakes, rivers or ocean and lots of open space and parks.
Agents who practice real estate in sunnier climes, especially Arizona, the Carolinas, Florida and Texas may be particularly busy showing homes to older Americans.
Sure, Millennials dominate the first-time homebuyer market, but overall, it’s older folks who have the means and the desire to buy homes, and they will be out there, looking for them, in 2018.
Don’t expect listings to be an easy catch if inventories remain suppressed in 2018.
A Value Insured survey conducted in spring of this year found that, although more than 60 percent of homeowners understand that this is the best time to sell, they also angst over finding their next home in a puny inventory and with soaring prices.
In fact, more than 60 percent of the homeowners surveyed said they are waiting for home prices to stabilize before they make their move. 2018 home sellers may want to go while the market remains tight. Change is in the air, it seems.
In fact, their wait may be over next year, at least according to Freddie Mac’s prognosticators, who say that
new construction will increase, helping to ease the inventory shortage, thereby “moderating prices.”
According to NAR, Gen X homeowners were the largest group of sellers in 2017. And, the Value Insured study finds that 62 percent of Gen X homebuyers are seeking a larger or “forever” home. So will a little luck, this group can show up in both your 2018 homebuyers AND 2018 home sellers lists.
Of course, they’ll need to sell off their starter homes first, positioning them to be your largest listing pool in 2018.
Sure. they were widely blamed for 2017’s low inventory, but 2018 may be the year the industry can shake them loose and entice them to finally downsize. Look for boomers to figure large in 2018 home sellers activity.
And, although it isn’t expected to happen until fall of next year, we can thank homebuilders for the turnaround.
“Builders won’t ignore this hungry market, and we’ll start to see a rise in new construction at the more affordable end, instead of all the luxury buildings we’ve seen lately,” predicts Zillow chief economist Svenja Gudell.
What more can a downsize-craving baby boomer ask for? Be on the lookout for boomers who have the potential to be both 2018 homebuyers and 2018 home sellers.
This trend may just be the key to convincing boomers that not only is it an amazing time to sell their large homes, but to buy a less maintenance-intensive retirement home as well.
The robust job market and rise in home values coupled with a larger inventory bodes well for listing agents in 2018.
Gen X homeowners have built up enough equity to finally pursue their upsizing dreams – buying the large homes that boomers will hopefully be selling.
- Which one are you? Figuring out who you are and who you will likely resonate with in these statistics can be helpful as you plan your efforts.
- Based on your answer to the first question, who do you want to target?
- Where are they? Where are they moving? Social networks, communities, schools – how can you find groups of the folks you want to target? Can you place yourself strategically in these already-established flows through ads, community involvement, and other activities?
- As you market, identify your targets and track your success by group. If you run a Facebook ad and it performs or under-performs, look deeper into the demographics – sometimes average performance across the entire demographic spread masks above and below-average results in particular niches. Identify these and test them in your next efforts.
- Make sure you have a great website (oh wait, is that too shameless?)
Owner & Operator,
Chad Hett
The Elite Group
Largest Home Inspection Company in North America
Best Selling Author “Secrets Of Top Producing Real Estate Agents: And How To Duplicate Their Success.”
