Gaining insight into today’s home sellers is key to understanding client needs and increasing referrals. The National Association of Realtors (NAR) Home Buyer and Seller Generational Trends Report takes a closer look at the motivations of today’s home sellers and where they are moving to.
The report comes from a 131-question survey mailed in July 2020 to a random sample of home buyers who had purchased a primary residence home between July 2019 and June 2020. A total of 8,212 responses were received.
The survey focused on the experiences of five generations of the American public. Two generations — Baby Boomers and Millennials — were subdivided into “older” and “younger” categories to create a total of seven age groups categorized by similar demographics and behaviors:
- The Silent Generation refers to individuals born between 1925 and 1945.
- Older Boomers are those born between 1946 and 1954.
- Younger Boomers are those born between 1955 and 1964.
- Generation X are those born between 1965 and 1979.
- Older Generation Y (Millennials) are those born between 1980 and 1989.
- Younger Generation Y (Millennials) are those born between 1990 and 1998.
- Generation Z are those born between 1999 and present.
Baby Boomers continued to hold the largest share of sellers at 43 percent. This generation typically bought new homes sized similarly to the ones just sold, with a difference of less than 100 square feet. They also tended to move for closer proximity to friends and family, due to retirement or downsizing.
Generation X made up the second-largest group of sellers (25 percent) and . had the largest share of sellers (23 percent) reporting an income of $200,000 or more. They also were most likely to move into a multigenerational home (18 percent).
While Millennials made up the largest share of buyers (37 percent), they were behind Baby Boomers and Generation X when it came to selling their homes (22 percent). This could be partially due to the large percentage of Younger Millennials who were more likely to be residing in a family member’s home before buying (28 percent). But Younger Millennials did have the highest percentage of first-time sellers (88 percent).
There was also a clear trend of Millennials and Gen X buyers moving to larger, higher-priced homes in the same state or area. Older Millennial sellers were more likely to have children under the age of 18 (79 percent). As a result, they tended to seek more space.
It makes sense that the silent generation accounted for a smaller percentage of home sellers (8 percent) as they are likely to have retired. They also reported the lowest median household incomes and were more likely to purchase senior-related housing (27 percent). Older Boomers and the Silent Generation moved the farthest distance, on average, with a median of 40 miles from their home sold to the home purchased.
Generation Z sellers (ages 18 to 21 years) were new to the 2021 report and made up just 2 percent of sellers. The sample was too small to show unique characteristics, but the data indicate that homeownership is important to this cohort and they offer a strong potential for the market in future years.
For all sellers, the most common reasons reported for selling their residence was to move closer to family and friends (15 percent), closely trailed by their home being too small (14 percent), and a change in family or living situation (12 percent). Most sellers tended to be married couples (71 percent), and the majority moved within the same state (70 percent).
How They Sold Their Homes
Sellers primarily used an agent or broker (89 percent) over other methods of sale. The top marketing methods used by real estate agents to market homes were Multiple Listing Service websites, yard signs, open houses, Realtor.com, and the real estate agent’s website.
Following close behind these methods were third-party aggregators, real estate company websites, social networking, and virtual tours. Social networking, which includes platforms such as Facebook and Twitter, was used most often to sell homes for Millennials and Generation X clients, but it was less popular among Baby Boomers and the silent generation.
The impacts of the COVID-19 pandemic and social distancing guidelines may be a contributing factor to the increase in virtual tours, social networking, and website selling methods. Now that buyers are becoming accustomed to a contactless online marketplace, real estate agents have adapted their marketing and selling practices to reach potential buyers.
What This Means for Today’s Real Estate Pro
Referrals remain a critical part of every successful agent’s business. The report indicated that 67 percent of recent home sellers chose a real estate agent based on a referral or one that they had worked alongside in the past. For Younger Millennials, this number increased to 75 percent.
For younger sellers, many used the same agent to buy and sell their homes. As they aged, this was less likely. Among those ages 74 and older, 45 percent used the same agent versus 67 percent of sellers ages 30 to 39 years. Generation Z and Millennial sellers wanted their agent to suggest ways to fix up their home to sell it for more, but Baby Boomers and the silent generation were more interested in their real estate agent helping to market their home to potential buyers.
Older sellers were more likely to initiate a discussion of compensation with their agents than Millennials. Both Older and Younger Millennials were less likely to bring up the topic and often did not know that commissions and fees could be negotiated.
By understanding an individual’s motivations for selling their home, real estate pros are better equipped to provide outstanding service to exceed client expectations. Gaining deeper insight into why a client wants to move and what they desire in a new home will strengthen client relationships and increase referrals as well as repeat business.