As affordability becomes a crucial factor for many homebuyers, Millennials are increasingly gravitating toward secondary cities across the U.S., with Denver emerging as a prime destination. Here, Kacey Bingham, Managing Partner of The Agency Denver, discusses why this vibrant city—recently ranked the hottest real estate market in the nation by U.S. News & World Report— attracts Millennials seeking a blend of quality of life and accessibility.
What neighborhoods in your respective regions/neighborhoods are attracting Millennial buyers most right now?
Millennial buyers in Denver are trending towards areas near the downtown core, but not directly downtown. The neighborhoods attracting Millennials most are the Lower Highlands and Cherry Creek.
What do you think is attracting them to these areas?
Community vibes in the areas millennials are flocking to is important. “Walking distance to a margarita” was a criteria for one of my recent Millennial home buyers. The areas Millennials are choosing offer access to parks an trails, but also entertainment, shopping and dining. It presents an easier lifestyle when you live close to everything. It allows residents to focus on living their lives rather than on chores like mowing lawns, for example.
What makes Millennial buyers different from other generations of buyers?
Millennial buyers want move-in ready homes. They don’t want projects, they are too busy, not to mention many work from home and therefore wouldn’t be able to live through a lengthy renovation.
They also want smaller, more minimalist homes that are low maintenance, with technology-driven features, and a location close to everything. Also, Millennials’ communication style is more technology-based, they prefer text and email.
Where do you see Millennial buyers coming from in your respective regions?
We see many transplants from the Bay Area and other parts of California, New York City, Chicago, and Texas. Denver ranked #4 by Forbes for most popular cities for Millennials to move to.
When it comes to owning a home, what amenities do Millennial buyers prioritize?
Move-in ready, updated properties in a solid neighborhood with walkability and a community feel.
Millennials are increasingly drawn to smaller, more affordable homes that offer low-maintenance outdoor spaces situated in vibrant neighborhoods. They prefer modern, energy-efficient designs that incorporate smart technology, such as automated lighting, smart thermostats, and smart locks. Low maintenance is a key feature, alongside eco-friendly attributes like drought-tolerant landscaping. Additionally, these homes often include space for a home office and features that support a healthier lifestyle overall.
Do you have any stats or data about Millennial buyers over the past year that are notable?
Denver was recently ranked the hottest real estate market in the nation by U.S. News & World Report. Among millennials that currently rent, 25% say they plan to always rent, up from 22% in 2021 and 13% in 2018.NAR reports that Millennials now make up 43% of home buyers – the most of any generation – an increase from 37% last year.
Recent data from Rocket Mortgage reveals that older Millennials are more likely to own homes, and the overall share of millennials planning to buy a home is increasing. In 2019, the median home purchase price for millennials was $230,000. However, while the average U.S. home down payment is nearly $62,000, 40% of Millennials expect to put down less than $10,000, which often leads them to either rent longer or purchase less expensive homes.
By Q2 2021, 71% of Millennials could afford less than half of the homes available on the market. Major hurdles for Millennial buyers include high housing prices and limited credit history. To overcome these challenges, 27% of Millennial home buyers rely on gift money from family or friends for their down payments. Additionally, 63% of Millennials use online resources to find their homes, a higher percentage compared to other generations, and they typically finance around 90% of their home’s purchase price, as highlighted in NAR’s 2023 Home Buyers and Sellers Generational Trends Report.
What are your predictions for Millennial buyers in your real estate market? What can we expect to see this year and into the future?
Given the current real estate market, I think Millennial buyers are going to have a large focus on affordability, simplicity, and central metropolitan locations. With costs on the rise, Millennials are going to focus on turn-key properties with minimal exterior maintenance as they don’t have a lot of excess funds to put towards renovations, landscaping and things of that nature.
For more insight into current market trends and the world’s most exciting real estate destinations, browse our other recent In the Knows: Buying Real Estate in Cape Cod, Why Buyers Love Steamboat Springs, Colorado, NorCal Real Estate Market, Santa Barbara & Montecito Real Estate Insights from Eric Haskell, The Rise of Lake Town Real Estate in Tahoe & Beyond, and Today’s Golf Course Home Market, Palm Beach to Palm Springs.
