More First-time Homebuyers Are Entering the Market

The share of first-time homebuyers rose to 36% in April 2020, up from 32% a year ago, according to a recent survey by the National Association of Realtors (NAR).

There are several factors motivating this trend:

1. A desire to move out of city dwellings and into more suburban/rural ones following COVID-19
2. A lack of a need to sell a property prior to purchasing one
3. Record-low mortgage rates
4. A lack of competition from investors scooping up properties

Altogether, these factors offer first-time homebuyers, many of whom were burdened by student loans and subsequently priced out of most markets for years, their first genuine opportunity at homeownership.

What are first-time homebuyers looking for?

The first-time homebuyer is typically younger, which often means millennial. Millennials, as you are most likely aware, approach home-buying differently than previous generations, and successfully courting them as a client involves recalibrating your marketing strategies.

Based on the insights derived from the successful marketing campaigns of our agents, here's what we recommend:

Consider starter homes a thing of the past

Whereas for previous generations, the typical homeownership journey involved slowly trading up in properties as families and incomes grew, millennials are more inclined to choose "forever homes." According to Realtor Magazine, millennials are increasingly skipping the starter home, immediately opting instead for something bigger and more expensive. One-third them paid more than $300,000, a big leap from the $150,000 to $250,000 other buyers typically pay for their first purchase.

Driving this decision is largely the desire for flexibility. What could be a home office today could serve as a nursery in a few years. Similarly, an area in the backyard hosting a fire pit for friends to gather around now could be repurposed to hold a swing set later. In other words, millennials seek properties that can grow and change with them. Therefore, for agents, assuming that millennial first-time buyers should be targeted solely with lower-priced properties would be a mistake.

Highlight amenities, and amenities, and amenities

Millennial homebuyers are typically less concerned with the utilitarian aspects of a property—i.e., proximity to school and work (especially as working from home begins more commonplace)—and more likely to opt for properties that feature an array of modern and enticing amenities.

While they do prefer luxurious touches—open floor concepts that combine multiple rooms, granite countertops, built-in wine coolers, to name a few—they're often primarily interested in energy-efficient and environmentally conscious ones. That often means fluorescent light bulbs, solar panels, lots of natural light, and big windows.

Bring a touch of downtown to them

While proximity to school and work may not be a top priority, millennials, especially those who are making the transition from urban life to a slower-paced suburban one, still desire to have some semblance of a downtown scene—bars, restaurants, cafes, and nightlife. Agents targeting these first-time homebuyers would be wise to underscore proximity to these areas in their listings and advertisements, even going so far to include photographs.

Two tips for marketing to first-time homebuyers

Understand where millennials are

Though it's obvious social media is the ideal platform to reach younger audiences, the engagement on them differs significantly, and it's important to know which platform resonates the most.

When targeting first-time homebuyers, we recommend using Instagram in your real estate marketing. Not only does the platform boast 1 billion monthly active users, the majority of which are millennial, but the ease of use of its image-sharing platform makes it ideal for conveying many of the amenities millennials find attractive. Instagram's targeting allows you to pinpoint these first-time buyers directly.

It also doesn't hurt that more than a third of the social platform's users have purchased directly from an ad—which no other social network can beat—and Instagram is small business-friendly, consistently outperforming other advertising platforms — delivering 10 times the engagement rate of Facebook, for instance.

Don't underestimate the power of your photos

These days, the standard advice for marketing to younger audiences is that your content, advertising or otherwise, should be visually appealing above all else. Fortunately for you, visual communications should be nothing new. You instinctively know that buying and selling houses relies on photos, videos, walkthroughs, and more.

The difference now, however, is maybe a few years ago an image didn't necessarily have to be in high definition. Or maybe, in certain instances, compelling copy would suffice in a place when an otherwise striking image wasn't available. These days, though, with every real estate agent having a camera right in their pocket, there really isn't much of an excuse for a lack of high-quality visuals of a property. Nowadays, if you don't have them, the assumption of millennials, fair or not, is that you're hiding something.

For agents with listings that feature visually striking images of the property—and can highlight the aforementioned amenities—Instagram is far and away the best option to optimize their draw with first-time homebuyers.

How Homesnap can help

We've had years of experience marketing on Instagram. When you entrust Homesnap Pro Ads with your Instagram advertising, you're investing in true marketing professionals. We've run close to half a million ads on social platforms, with nearly 150k on Instagram alone. You can make edits to your ads whenever you'd like, but you can have the comfort of knowing that we'll manage your ads, and do everything for you. By putting your ads in the hands of experts, you'll ensure you're optimizing your marketing campaigns toward these first-time homebuyers.

To view the original article, visit the Homesnap blog.