To sell housing, developers must understand the similarities and differences of today’s most important buyers— Millennials & Baby Boomers
by David Wolf
Millennials, almost 80 million strong, are the largest U.S. generation to ever live. So it’s easy to assume they’re going to drive the housing market in the next five years. But builders and developers who ignore the “Silver Tsunami”—the 76 million still-vibrant Baby Boomers who are entering their retirement years—will miss major opportunities to profit.
Ironically, Millennials, the laidback digital natives dubbed “Generation Me” by social scientists have much in common with the Baby Boomers who spawned them. As Boomers opt out of large, high-maintenance homes, at the same time their budget-conscious Millennial children are finally buying their first residences, both generations are gravitating towards the same type of housing: functional, efficient, design-savvy dwellings in vibrant, walkable, amenity-rich locales. To stay profitable, builders and developers need to target products to both generations.
The analytics-driven research we do at ON Collaborative helps to understand what resonates with each market segment and develop hyper-local business plans. Here are the issues builders and developers must keep in mind.
Know Each Generation’s Pleasure and Pain Points
It’s critical to assess what each generation needs and develop a site-specific mix of elements for each project. Instead, beefed-up basics and attention-grabbing extras now reign supreme. The latter—the extras that dazzle and woo—are singular to each community and analytics-driven.
Long before those extras come into play, we know Millennials and Boomers favor open floor plans that foster flexibility and interpersonal connectivity; high quality fixtures and finishes, especially in the kitchen; lifestyle enhancing communal spaces and amenities; and pet friendly features such as dog runs and grooming areas. But Boomers favor traditional design features, space for hobbies and leisure activities, home offices that can double as guest rooms, and walkable communities with parks. Millennials prefer sleek, unique design features, affordability, denser neighborhoods with edgy offerings, and access to major transportation hubs.
Pay Attention To Each Generation’s Values
Despite their many similarities, Millennials and Boomers have different values. Take Millennials’ vibrant lifestyle. It’s not just about convenience and activity; it’s an expression of their value for diversity and inclusiveness. They want to be part of a vital community that feels welcoming, flexible, and democratic, and where informal hubs anchor social life. They covet new experiences rather than material possessions. The more unique an amenity, the better; think game arcades, indoor rock-climbing walls, programming such as out-of-the-box fitness classes to inspired happy hours, shared car services, fully enclosed work stations in common areas, and fully-equipped music rooms.
On the other hand, Boomers still place a premium on properties that reflect exclusivity. They value refinement and sophistication, and traditional markers of this quality include doormen, valet parking, concierges, and elegant private lounges.
Consider Each Generation’s Resources
Budgets are always a key consideration, especially since the disparity between these two generations is most evident here. Ultimately, neither generation will buy places that don’t have the features they covet.
Even though Boomers are downsizing, space is still their holy grail. They want room to entertain, accommodate grandchildren and guests, work at home, and pursue hobbies, so they need larger units than Millennials—and can afford to pay for them, along with top-shelf amenities.
Though Millennials have less money to spend, they’re more flexible and adept at making trade-offs. They weigh unit size against other assets—especially location and quality of amenities. Millennials are willing to give up unit space if it means access to hot neighborhoods, major transportation hubs, smart appliances, state-of-the-art fitness facilities, doggie daycares, rideshare services, and grocery delivery.
Despite the two generations’ different wants and needs, units that will “wear well” and can adapt to future tastes are essential and achievable with analytics that gauge each development’s target market, geographic requirements, and trends. Pleasing both cohorts in the same project can be a balancing act worthy of the Cirque du Soleil, but it’s possible with an analytics-driven approach.
David Wolf is president of ON Collaborative, a full-service residential real estate marketing and sales firm that provides best-in-class research, planning and advisory services to residential developments nationwide. He may be reached at oncollaborative.com