The
millennial generation that grew up with computers as appliances and fed on
video games are looking for a high-quality virtual reality experience when
looking for a home.
For all
the fanfare about how millennials were poised to be the biggest home buying
generation yet, there are still a few things that must happen to get them out
of their parents’ basements or shared rentals. Interest in buying, however, is
not the issue. According to new data from Apartment List, 80% of millennials do
have the desire to buy their own homes, but economic factors are delaying the
process for up to two decades if they must continue to assume, they must save
up for a 20% down payment. Even if this was reduced by half, however, only 33%
of millennials would be able to save that amount in five years or less.
For those millennials serious about buying a home, the process
will look much different than for previous generations. One reason for this is
the relatively new introduction of virtual reality (VR) technology into the
real estate market. This newer technology is more than a videographer doing
360-degree fish-eye lens panoramas of the interior of a home for sale. They are
an interactive walk-through the buyers themselves can experience, stopping to
examine every floor vent, cutting edge cooktop, or even watching the pool sweep
as it Roombas through blue waters. (If you want to get a taste of VR at it most
potentially scary best, check out Spielberg’s Ready
Player One.)
Let’s face it. The millennial generation grew up with computers as
appliances. Fed on video games as their parents shook their heads thinking
it was all in good fun while wondering why their kids abandoned bicycles and
stopped watching old horror movies on TV. What they turned out, however, were
adult children who now demand a high-quality VR experience. This next gen of
homebuyers will wonder how their parents were ever able to put up with a world
that did not offer it.
It is estimated by VR manufacturer Matterport, a company founded
in 2011, that potential buyers spend three to six times more time examining a
real estate ad listing when they study VR ads. It’s what marketing types call
“sticky” advertising. Touring real estate listings is not only livelier, but
also more fun. Homes listed using this technology come with a 3-D walkthrough,
making a digital copy of the inside of the house as well as its outdoor spaces.
Matterport supplies a dimensionally accurate model of the space precisely as
the human eye would see it, whether it’s land, office building spaces, or
homes, and the future includes (just like the Spielberg movie), being able to
attach a VR headset to your phone.
Using VR to showcase homes is something that many high-end real
estate agencies are already doing, given that 95% of buyers use the internet to
look for homes, and 51% buy homes that they have found using the internet,
adding VR to the mix seems inevitable. This technology to show homes is already
becoming a touchstone for many luxury home buyers, done without those buyers
ever having stepped foot onto a property, especially where in-person showings
simply are not feasible. Not only will millennials expect this service to be
made available to them for ALL types of home sales; they will likely demand an
increasingly higher quality experience overall than today’s Realtor online
presentations with music playing in the background or 25 still photos attached
to a listing.
Then there is social media— something millennials cut their
teeth on. The driving factor behind Facebook’s decision to buy Oculus Rift was
its potential for use in the platform’s marketplace. Considering that Facebook
is heavily invested in the growth of person-to-person sales, this can have a
serious impact on the amount of time it takes to buy a house. Savvy agents will
have to get behind this as the globe and its technology spin ever faster.
Another of the consequences of millennials’ inability to purchase
homes as early as previous generations is a major uptick in the single family
and apartment rental industry. While single and attached home rentals are
growing at an even faster pace, apartment rentals are being changed using
virtual reality. Time and labor-saving new tech practices enable rental
managers to simply schedule live VR sessions, showing properties and answering
questions as potential renters’ sip on soy chai lattes on their sofas. Using
MARK.SPACE, a blockchain-powered 3D and VR open source platform for creation
and integration of spaces and objects, they can also record showings and make
those available to potential renters to view online.
What all this does is elevate the importance of in-person
showings, since tire-kickers will be fewer and farther between. As more
potential buyers can use virtual reality to tour potential homes online, fewer
potential buyers will come to open houses or even in-person viewings with real
estate agents. Buyers benefit from this because they can tour homes using VR
and eliminate from consideration those listings that aren’t appealing based on
what they see, translating into less time, travel and expense looking at homes.
Sellers and agents benefit because they can sell homes faster and not waste
time trying to market homes to tire kickers, but older real estate consultants
who are slower to embrace and invest in technology as a driver in home sales
may have a tough time making the transition to this type of buyer as they watch
their younger brethren embrace it with great gusto.
Approximately 71% of millennials express very positive feelings
regarding virtual reality. This generation can't imagine having someone in a
uniform fill up their cars, after all. They can’t even picture a world without
online person-less checkout and virtual shopping carts. While members of older
generations may need some convincing that VR adds value to the real estate
process, millennials will be all over it.
As I mentioned, more millennials are interested in homeownership
than many people think. Economic factors may be delaying the process, but when
millennials are ready to purchase a home, or even look for a rental, it’s not
unfathomable that virtual reality will be an important part of the process,
making purchasing a home simpler, more convenient, and less work.
Thank you for stopping by my blog, please leave me a
comment, they are always encouraged and welcome.
Roxy Redenbaugh
SR Loan Consultant
Branch Manager
Cell 808-457-2455
NMLS #269926
