Millennials and the Market: How Young Buyers are Shaping the San Diego Real Estate Market - Article Banner

Just about everything has a generational nuance to it.

Real estate is included in that statement. 

Different generations approach the market differently. They have different priorities when they buy and different expectations when they sell. Someone in the baby boomer generation or even out of Generation X might find that things are dramatically different in the market now, compared to when they bought or sold a home 20 or 30 years ago. 

There was a lot of talk about the millennial generation being slow to want to buy homes. That has changed just a bit over the last few years, and if you’re paying any attention to the trends and shifts in the market, you likely know that people who identify as millennials have become a driving force in the real estate market, especially in San Diego. 

With their unique preferences and capabilities, this generation is changing the face of the market and how we think about investing in real estate. If you’re working with a millennial who wants to buy a home, it’s important to understand the impact of these young buyers and how to navigate the changes they bring about. 

We work with investors at every level. Some of the buyers we support have been buying and selling properties for years. Others are venturing into the home buying process for the first time.  Some are buying for themselves, and others are buying with the intention that they’ll rent out the property, either in the short or long term. 

Today, we are focusing our discussion on the specific topic of millennials and how they’re showing up. We want to explore how this generation in particular is shaping the San Diego real estate market. How are they impacting inventory, sales, and rentals? 

Here’s what you need to know to stay ahead of the game.

The Importance of Location and How Millennials Move

One of the most significant ways millennials are shaping the San Diego real estate market is by placing a premium on location. They are much more likely to choose a property near public transportation, city centers, and other amenities over a larger home in a more suburban area. This is a dramatic shift compared to previous generations, which appeared to prioritize space and neighborhoods outside of city centers. 

Additionally, the millennials we have seen moving through the market tend to value walkability and access to cultural attractions, restaurants, and nightlife. As a result, neighborhoods like North Park, Hillcrest, and Downtown San Diego have seen a surge in demand and high property values.

One of the reasons so many millennials were slow to enter the housing market as buyers is that they’re the most mobile generation we have seen. They settled into their professional careers as remote work became more normalized, so they’ve had more flexibility in where they choose to live and even how long they plan to stay. The millennials buying homes will not necessarily hold onto those homes until retirement. They’ll choose a location that they like today, with the understanding that moving will always be an option if another location becomes more advantageous. 

Focus on Technology in San Diego Home Buying and San Diego Homes 

Another way millennials are impacting the San Diego real estate market is by incorporating more technology in their buying process. From online searches to virtual tours, this generation values convenience and accessibility above all else. There will not be endless phone calls. There will not be a number of in-person meetings. 

As a real estate investor who is hoping to attract millennial buyers, you need to ensure that your properties are easy to find online and have a web presence that is informative and engaging. Additionally, virtual tours and video walkthroughs are becoming more popular in the market, allowing buyers to experience a property from the comfort of their own home.

Technology is important to millennials when they’re searching for a home. 

It’s also important to them when they’re living in a home. Any home that is equipped with smart home technology will be immediately more attractive to this generation of buyers. Some of the smart home tech that these buyers will find most appealing includes: 

  • Voice-Activated Assistants. Millennial buyers want a home that is integrated with voice assistants such as Amazon Alexa, Apple’s Siri, and Google Home, allowing them to control home devices hands-free. This technology lets you control everything from lights to thermostats to music systems with just the sound of your voice. A home that integrates whatever systems they already own will be especially attractive. 
  • Smart Thermostats. Investing in a smart thermostat is one of the best ways to increase your home’s energy efficiency and its appeal to potential buyers in this generation. Smart thermostats can learn your preferred temperature settings and adjust accordingly. They offer remote control options that allow users to adjust their home’s temperature from anywhere, which can save on energy bills.
  • Smart Lighting. Smart lighting systems offer convenience and security by allowing the homeowner to control their home’s lighting from their smartphone. With built-in scheduling features and motion sensors, smart lighting systems can also help conserve energy.
  • Smart Security Systems. With millennials being one of the largest groups of homebuyers, security is a top concern. Smart security systems offer more than just alarms and monitoring, depending on the specific options chosen. They allow homeowners to monitor everything from door locks to surveillance cameras right from their phone, no matter where they are.
  • Smart Home Entertainment. Investing in smart home entertainment, like surround sound in your living room, will make your home perfect for entertaining. The home movie experience that can be achieved with a high-quality entertainment system is unmatched.

Investing in smart home technologies is the way of the future, especially for millennial buyers who have grown up with the latest gadgets and technology. By understanding these technologies and offering them to potential buyers, real estate investors can increase their properties’ value while also meeting the millennial homebuyer’s needs and expectations.

Millennial Home Buyers are Embracing Sustainability

Sustainability is a growing trend among many millennials, and it is starting to have an impact on the San Diego real estate market. Energy-efficient appliances, solar panels, and LEED certifications (Leadership in Energy and Environmental Design) are becoming more attractive to younger buyers. Millennials are looking for eco-friendly homes and are willing to pay a premium for them. If you are interested in selling homes to this particular demographic, you must be aware of these trends and incorporate sustainable features into your properties.

The green features that our millennial buyers tend to favor the most include: 

  • Energy-efficient windows. This is an eco-friendly upgrade that’s pretty easy to do, and can add immediate value to a property. Such windows will help reduce energy consumption by keeping a home cooler in the summer and warmer in the winter.
  • Energy-efficient appliances. Replacing old appliances with energy-efficient models can also appeal to millennial homebuyers. Good appliances are essential when you’re marketing and listing a home for sale, and you’ll find that this generation of buyers is looking for appliances that look good and work well. When they’re eco-friendly and likely to use less energy, you’re in an even stronger position. 
  • Low-flow plumbing and irrigation. Water is becoming an ever-increasing concern across the country, and there’s been a real concern about the sustainability of the water supply. So, considering upgrades and updates that respect water will make your greenest generation of home buyers happy. They’ll favor low-flow fixtures like toilets, shower heads, and faucets in bathrooms and kitchens to reduce water consumption. Low-flow fixtures not only help save water but can also save money on water bills, which is also attractive to younger buyers. According to the EPA, installing a low-flow toilet can save a family of four up to 22,000 gallons of water per year. 

If you’re trying to sell an older home with a lot of energy vampires, you’re not going to get a lot of interest from millennial buyers. Make some green upgrades and you’ll find you can attract these buyers far quicker.

Demand for Flexibility

Millennials also prefer flexibility in their living arrangements. Renting is very popular among this generation, and they are more likely to move around for work or other personal reasons. As such, they are looking for short-term leases and co-living options that allow them to move more easily. As a real estate investor, it may be worth exploring properties that cater to this demand, like multi-unit apartment buildings or co-housing developments. While we’ve been talking about millennials as buyers, there’s still a strong community of renters who are going to continue demanding flexibility, technology, and green, sustainable living when they’re looking for a rental home. 

The San Diego real estate market is changing, and millennials are leading the charge. Understanding their unique preferences and buying habits is essential for any real estate investor looking to succeed in this market. By prioritizing location, technology, sustainability, flexibility, and community, you can begin to adapt to these changes and attract the next generation of homebuyers.

Contact Property ManagerTalk to us about this if you have questions. Contact our team at Chase Pacific Property Management and Real Estate Services.