1. Millennials, Motivations,
Future of the
American Dream
and the
Of Homeownership
PRESENTED BY:
Alex Perriello
CEO, Realogy Franchise Group
Presented to the Housing Renaissance August 2014

2. The Next Great Generation
Peter Pan Generation
Digital Natives
Generation Sell
The Next Great Generation
Peter Pan Generation: Kathleen Shaputis, Anthropologist: Single; may be living at home; no mortgage; no career plan; no children; love of travel and expensive things; Adult-lescents”
Digital Natives: Mark Prensky, learning and education expert. Technology is pervasive in all aspects of their lives; they will continue to evolve with the exponential changes occurring in technology. Access to information
* Expectations for instant gratification
* Personalization and service standards
* Collaborative problem solving
III. Generation Sell was used by author William Deresiewicz to describe Millennials’ interest in small businesses and their entrepreneurial spirit
IV. The Next Great Generation: William Strauss and Neil Howe, generational theory experts found that Milllennials are more open minded and civic minded than their Gen X and Baby Boomer predecessors. The Millennials are earnest, can-do types, more like the World War II generation than their parents or older siblings. The Millennials, the authors write, ''will correct what they will perceive to be the mistakes of boomers, by placing positivism over negativism, trust over cynicism, science over spiritualism, team over self, duties over rights, honor over feeling, action over words.'‘
Why the Discrepancies?
First and foremost: it’s too early to tell what the Millennial generation will be and accomplish. The generation is large and globally connected, making it both easy and difficult to generalize… but certain things are true:
Cultural and demographic ethos defined by major—and sometimes clashing—forces. Our Millennial cohort was born between 1978 and 1995, as a new millennium was dawning. The world flattened and globalization exploded. They came of age during the Great Recession, making them more cautious, and delaying important milestones such as financial independence, marriage and child-birth, which are key triggers of home ownership. As a result, Millennials have had more exposure to the rest of the world and feel a responsibility to take care of it—and they often hold companies and other institutions to the same standards. Their early lives are marked by foreign and homegrown terrorism of 9/11, the Oklahoma City bombing, and the Columbine shooting. But they also had the first helicopter parents to make them feel valued, secure, and hopeful. (helicopter parents swoop in and fix things, particularly as it relates to their children’s education or job seeking. Child centric rearing revolves around the child, setting them as leader of the family) As socially responsible, diverse, and always-on tech natives, these traits are shaping the culture of the early 2000s. With the extreme access to technology—notably mobile and social technology—Millennials have different expectations for everything from commerce to information access—and abilities to problem solve. Collaboration is a hallmark, vs. the Baby Boomers, or “Me” generation.
Meet the Millennials

3. The Millennial Ethos 70% see themselves as future entrepreneurs
Charitable and cause-minded
63% donated to charities
43% actively volunteered or were a member of a community organization
52% signed petitions
78% were influenced by how innovative a company was when deciding if they wanted to work there
Study: 7800 Millennials worldwide were surveyed about business, government and innovation
* The entrepreneurial mindset speaks to important issues about how they view success, not the least of which opens up possibilities for Millennials embracing careers such as real estate agents
* Their parents raised them to be charitable and cause-minded, both for the good of the world and to help distinguish themselves in the ever-competitive academic world. Crowd funding such as Kick Starter, and even social media—spurs this along. Access to information keeps them informed, and able to make decisions about causes they support
*When it comes to deciding where to work, charitable commitments make an impact (makes them feel like they will be treated well), but also a company’s focus on innovation.
*They believe the biggest barriers to innovation are management attitude (63 percent), operational structures and procedures (61 percent), and employee skills, attitudes, and (lack of) diversity (39 percent).
The Millennial Ethos
Source: Deloitte Millennial Survey, 2014

4. Factors Impacting Millennials and Homeownership
Globalization
Impact of the Great Recession
Milestones delayed
Employment pressure
Substantial student debt
Mortgage underwriting standards
The rental dilemma
Baby Boomers and Gen X compete for jobs
Globalization: as defined, is the process of international integration arising from the interchange of world views, products, ideas, and other aspects of culture.[ Advances in transportation and telecommunications infrastructure, including the rise of the telegraph and its posterity the Internet, are major factors in globalization, generating further interdependence of economic and cultural activities. For Millennials, the world is flat. Employment and living opportunities exist everywhere, and due to the job market competitiveness, they want to be flexible until they find a stable place to land. This is the first generation of people for whom employment, living and social connections are as easy outside of their own country as it is inside. Their perceptions of what is possible knows no geographical boundaries thanks to social media, always-present internet and connectivity, and exposure to news, and academic or employment programs that open up new frontiers for them,
Great Recession is the most major issue impacting home ownership, which has delayed many important milestones such as stable employment, marriage and children—all home buying triggers.
Most notably by unemployment and underemployment are an issue for this generation
More than 40 percent of recent U.S. college graduates are underemployed or need more training to get on a career track
Among year olds: Effective unemployment rate, including those who have given up looking for work, is 15.2 %.
1.9 million young adults have given up looking for work due to the lack of jobs. The unemployment rate for year olds is 10.5 % 
Sources: Accenture Millennials Study, 2013 (under-employment statistics); Unemployment Source: Generation Opportunity, a national, non-partisan youth advocacy organization, iMillennial Jobs Report for June 2014.
From 2005 to 2012, the percentage of men ages living in their parents' home rose from 13.5% to 16.9%, according to Census Bureau data. For women of the same age group during the same time period, the rate of those living at home went from 8.1% to 10.4%, the data show.
The Project on Student Debt found that two-thirds of 2011 college graduates — the most recent year for which data are available — graduated with an average student loan debt of $26,600, or $27,500 when adjusted for inflation. Contrast that with 1993, when less than half of students graduated with debt, and those who did averaged $9,350,according to data from the Project on Student Debt. In today's dollars, that's about $15,000
Mortgage underwriting standards posing a challenge:
Tighter mortgage-lending requirements add to the trouble for young would-be homebuyers. The numbers paint a picture of a generation falling behind:
36.8% of people under 35 own homes, down from 43% in 2006.
61.4% of people ages 35 to 44 are homeowners, down from nearly 69% in 2006.
Just 9% of people ages 29 to 34 got mortgages in 2009 to 2011, compared with 17% a decade earlier, even before home prices inflated and mortgages became easy to get.
40% of those with student loans have put off making big purchases such as homes and cars.
RENTAL : low home prices and low interest rates make investors a bigger force in the market. Investors are buying up many properties, and Millennials face stiff competition with investors who are paying cash; can offer a quick close, no appraisal, and price flexibility and that, combined with the difficulty of securing a down payment and being qualified for a mortgage, sometimes renting is an easier solution for Millennials vs. buying. Despite the fact that in many markets, buying is more affordable over time. ; easier to rent than to buy
Job Competition: Baby Boomers are not retiring as early as once assumed, due to the impact they have felt during the Great Recession. A large, still employed generation (and one with a tremendous work ethic), combined with the fact that Gen X is still going strong (and will continue to for the next years) in the job market makes this the first time that three large, distinct generations are competing for jobs at the same time. Baby Boomers have been counted as 76 Million people; Gen X is 41 million strong.
Factors Impacting Millennials and Homeownership
*U. S. Census Bureau, Monthly Labor Review, Project on Student Debt, Institute for College Access and Success, Consumer Financial Protection Bureau.

5. Perceptions & Priorities
40% planning buy in the next 3-5 years
75% believe owning a home is an indicator of success
70% believe that the recent housing downturn has made them more knowledgeable about homeownership than their parents were at their age
Nearly all are willing to adjust their lifestyle to save for a home
Prefer rooms for living… not living rooms
Elbow grease and essentials for a dream home
Better Homes and Gardens® Real Estate released the results of two national surveys of year old Americans that reveal that the impact of the housing crisis has given rise to two of the most knowledgeable generations to become homebuyers, Generations X and Y, which account for an estimated 103 million Americans. More than three-quarters (77 percent) of the Gen X and Y Americans surveyed believe that they have become increasingly knowledgeable about homeownership due to increased media coverage that has magnified real estate topics throughout the past six years. The survey’s findings show that these two younger generations of potential homebuyers are not deterred from home buying and believe owning a home is a key indicator of success (75 percent). Furthermore, they are willing to do their research and save in ways that may surprise those who believe the values of Gen X and Y have strayed from those of their parents, including taking a second job and moving in with mom and dad.
Key findings from the Better Homes and Gardens Real Estate survey include:
• Not the “Me” Generation. The majority of Gen X and Gen Y survey respondents (71 percent) understand that homeownership is not something they deserve; rather it is something they must earn. Nearly all those surveyed are willing to adjust their lifestyle to save for a home by eating out less (62 percent), working a second job (40 percent) or even moving back home with their parents (23 percent).
• In the Know. Sixty-nine (69) percent believe that the recent housing downturn has made them more knowledgeable about homeownership than their parents were at their age. Gen X and Y members appear to be doing their homework before making one of the biggest investments of their lives. For those surveyed, interest rates (58 percent), home prices in a desired neighborhood (59 percent), and the ability to secure a loan (51 percent) are the top areas to research before buying.
• Homeownership is the New Bling. Gen X and Y are not blinded by flashy signs of success; 75 percent believe owning a nice home is a fundamental indicator of success over taking extravagant vacations (12 percent), owning an expensive car (9 percent), or owning designer clothing (5 percent).
• First Things First. Gen X and Y want to make sure they are ready to own. Sixty-nine percent believe someone is ready when they can afford to buy while also maintaining their lifestyle. For 61 percent of respondents, the “readiness indicator” is when they’ve landed a secure job.
Results indicate that the next generation of homeowners seeks essential, purposeful homes (77%) equipped with the technological capabilities they have grown accustomed to, as opposed to stereotypical luxury homes preferred by many in their parents’ generation.
The Fix-It Generation: While homeownership presents new responsibilities and surprises for first-time homeowners, Millennials are prepared for home maintenance tasks. Nearly 1 in 3 (30%) Millennials surveyed would actually prefer a “fixer-upper” to a house with minimal repairs needed.
They aren’t afraid of rolling up their sleeves either. Nearly half (47%) of survey respondents would be more likely to tackle a home maintenance problem themselves, rather than calling a professional to handle the job. Furthermore, 72 percent of Millennials consider themselves just as handy—if not more so—than their parents.
Bigger Isn’t Always Better: Unlike their Baby Boomer parents, 77 percent of Millennials surveyed would prefer an “essential” home compared to a grand stereotypical luxury home. This generation wants their living quarters to be as unique as they are; more customized and less “cookie cutter” (43%).
To that end, Millennials seek for each room of their home to serve a purpose fit for their lifestyle. For instance, 1 in 5 of survey respondents agree that “home office” is a more appropriate name for their dining room based on what they typically use it for, and 43 percent would like to transform their living room into a home theater.
Home, Sweet (Smart) Home: When it comes to the next generation of homeowners, more than half (56%) of Millennials believe home technology capabilities are more important than “curb appeal.” If a home is not up-to-date with the latest tech capabilities, 64 percent of Millennials surveyed would simply not consider living there.
In addition, 84 percent of the younger Americans surveyed believe that technology is an absolute essential to have in their homes. The most sought-after tech being an energy efficient washer and dryer (57%), security system (48%), and smart thermostat (44%).
Their Home, Their Way: Millennials have a fresh perspective on furnishing a home. Fifty-nine (59) percent of those surveyed would rather have extra space in their kitchen for a TV, as opposed to a second oven, and they seek to be entertained in every room of their home. While kitchen renovations are likely to remain a top improvement priority, tech updates are highly desirable, as well.
In fact,  41% Millennials would be more likely to brag to a friend about a home automation system over a newly renovated kitchen.
Perceptions & Priorities
Better Homes and Gardens® Real Estate national studies, Fall 2012; Spring 2013

6. Age and diversity alignment are issues with current REALTOR® demographics
Despite this, Millennials state they need agents more than ever
According to an NAR study, 2014 Member Profile, the typical REALTOR® is a 56-year-old white female who attended college and is a homeowner. According to a 2014 Pew Research study, just 57 percent of those between the ages of 18 and 33 are non-Hispanic whites, four points lower than members of Generation X and 15 points lower than the Baby Boom generation. That diversity underscores the rapidly changing face of a country in which minorities are playing an increasing role in politics.
Younger buyers relied on real estate agents to help them understand the buying process, while older buyers most appreciated real estate agents pointing out unnoticed features or faults with the property. According to a Harris Interactive Study from Jan 2014, 87% of Millennials under 33 are likely to use an agent, vs. 80% of Gen X, 76% of Baby Boomers, and 74% of Traditionals (ages 61+).
Buyers of all ages were most often referred to their agent by a friend, neighbor or relative, although older buyers were more likely to have worked with the same agent they previously used to buy or sell a home. In choosing a real estate agent, the agent’s honesty and trustworthiness was the most important factor for all ages except for senior buyers, who more often mentioned the agent’s reputation, which was the second most important factor for other age groups.
Alignment
2014 National Association of REALTORS® Member Profile; Pew Research; 2012 US Census; Harris Interactive Study

7. Align digital and social brands with your offline brand
Be useful during the Dream Phase
Set communication expectations early and follow through
Embrace your role as expert and educator
Bring more to the table than they can find on their own
Make every interaction and experience count
Understand that your social and digital presence is a big part of the consideration process for Millennials. Make sure your service promise—and delivery—is as strong online as it is offline. Make sure you have a presence, and keep it current and engaging.
For many Millennials, their Dream Phase (when they are considering and doing light research) can last up to 2 years. This provides agents, and other real estate-related professionals the opportunity to form, cultivate and strengthen relationships. To share content and insights. To be there to answer questions—whether formally or informally. This is not wasted time and effort—because one day they will be ready to buy, and you want to be top of mind when they do. BHGRE, for example, prides itself on providing content—educational about the transaction, Do-it-Yourself articles and videos; important FAQs, and even content about what to do once you have moved in to help Millennials get inspired and motivated during the Dream Phase. Traditional communication methods such as and direct mail still work, but social media provides an inexpensive and time efficient way to get these messages out.
Ask them how they want to communicate. Understand their schedules, times of day. Explain that for certain situations, text may not be sufficient.
Millennials want to be educated. Millennials will do most of their research online; they will arrive more educated than most. However, they need help interpreting data and information; for many this will be their first experience in the real estate transaction. Set expectations; give context
Because they are new at this, we tend to see that they don’t separate what we see as distinct processes from one another (mortage vs. home visiting with agents vs. inspection)… so if they have a negative experience it reflects on all of us
* Above all:
*Listen to data, research, social media, word of mouth
*Interpret trends and feedback into your business
* Execute on those learnings: we live in a time where the voice of the customer is loud and clear: it may not be what we want to hear, but it is there to guide us. Companies, brands and individuals who strategically capitalize on this will succeed
What this Means

8. Thank You