As millennials buy more homes, developers strategize to bring them in
Don’t believe the naysayers: Young people are buying homes.
Millennials, defined as buyers between the ages of 18 and 37, are the nation’s largest block of home buyers by far, accounting for 42% of home sales in a 12-month span, according to a 2017 housing survey from Zillow.
That’s a big half-decade jump. Five years ago, the same block accounted for 31% of sales.
Now, home builders are tasked with figuring out what millennials want, and incorporating those features into new developments.
New Haven, a planned community being developed by Brookfield Residential within its massive Ontario Ranch development, is using amenities, events and high-speed Internet to attract a younger demographic.
“One of our priorities was delivering the recreational areas before delivering the model homes,” said John O’brien, Brookfield’s vice president of Southern California housing.
The logic is that a tour with stops at three pools, two clubhouse buildings and a zipline area has a better chance of wooing a buyer than a simple home walkthrough.
And with a nod to tech-minded millennials, the neighborhood offers a gigabit service, the first of its kind in Southern California. Each home is hardwired to a fiber network infrastructure capable of downloading a movie in a few seconds.
That perk was especially appealing to resident Sam Shwetz, who moved into New Haven in October with his wife, Sydney.
“When I lived in Japan, gigabit Internet was standard, but it almost doesn’t exist here,” he said. “That was the icing on the cake.”
The couple, both 25, were also drawn by the $445,000 price tag, as well as the threebedroom, 2.5-bathroom home’s high ceilings and open floor plan.
Brookfield’s efforts are paying off, with millennials accounting for 39% of New Haven home sales so far.
Other developers say they’ve noticed on-thego millennials aren’t as wowed by fancy extras.
Michael Arzani, a developer whose most recent home sold for $3.3 million to a millennial couple in West L.A., said in his experience, millennials prefer an open aesthetic over having a home theater or wine cellar -- amenities that tend to be must-haves for older luxury home buyers.
In the eyes of younger buyers, properties with strict setups and complicated floor plans can come off like they’re telling people how to live.
“There are less choices in those types of properties, and modern homes represent freedom,” Arzani said. “You don’t have to eat in a certain room or entertain in a certain area.”
Brian Falls, vice president of development at real estate group Palisades, said that although the company provides the typical luxury facilities, he considers the city to be the primary amenity.
“Our core idea is interesting urban design and architecture that helps people feel connected to the neighborhood that they’re in,” Falls said.
Palisades is developing luxury condos in hot spots across Southern California -- including Westwood, Beverly Hills, West Hollywood and Santa Monica -and teaming up with designers to make the buildings match the flair of their respective cities.
For its complex in Santa Monica, called Aire, the company worked with JFAK Architects to fill the building with communal spaces. A green wall of plants greets residents through the gate. Further in, the building wraps around an open-air courtyard.
Aire has sold 18 of its 19 spots. Roughly half of its buyers are millennials.
The group, catering to the Instagram crowd, is also experimenting with public art. One of its properties, a retail and work space in Santa Monica, features a massive mural of a giant binocular-toting boy in beachwear. They plan to expand the mural concept to all their complexes.
“How can we help pull in a neighborhood instead of projecting outward?” Falls said. “Millennial buyers want to be connected to their neighborhoods, and public art is an opportunity to embrace a community more authentically.”