Once considered homebuying johnny-and-jenny-come-latelies, members of the millennial generation have been making up for lost time.
Now ranging in age from 27 to 42, the nation’s 75 million millennials have become the driving force of residential home sales in recent years. In 2022, they made up more than half of all homebuyers, according to a report from Rent Café. Though they are predicted to come in second place this year by the National Association of Realtors — to baby boomers aged 59 to 77 — the group also known as Gen Y will still make 28% of all home purchases nationally in 2023.
Millennial buyers have been a major factor in the Midpeninsula residential market in recent years. These days, they are often in “move-up” mode, seeking more expansive housing for growing families.
Millennial Jasmine Lee, a Realtor in the Menlo Park office of Coldwell Banker Real Estate and a member of the Silicon Valley Association of Realtors’ board of directors who chairs the association's Menlo Park-Atherton district, said buyers in her age group have made up the lion’s share of her clients in recent years.
“I have lots of clients in that age group,” Lee said. “In fact, they are the majority of my clients."
Lee is among several Midpeninsula real estate professionals noting it’s not surprising millennials are major players in the local market – even one as expensive as this one. Just like their baby boomer parents or older Gen X siblings, local Gen Y buyers are often flush with six-figure, high-tech incomes and generous stock options.
“And, they are now in their prime homebuying years,” Lee said, noting three of her most recent clients had bought their first homes with her seven or eight years ago.
Now starting or expanding their families, Lee said those recent clients were looking for larger homes in Menlo Park and Redwood City.
Finding a creative path
Millennial Francesca Lampert, 30, considers herself fortunate to have been able to buy a 1950s-era fixer-upper in her hometown of Redwood City. Lampert, a graduate of Sequoia High School and the University of California, Berkeley, said she and most of her fellow millennials have had to seek creative paths to home ownership in such an expensive housing market as the Midpeninsula.
Openness to having roommates, living in multigenerational households, buying investment property and fixer-uppers are among some of the creative approaches that are helping Bay Area millennials become homeowners, she said.
Lampert’s first home purchase was actually an investment property that gave her the ability to later purchase what is now her primary residence. She and her pet dog, Finn, are looking forward to a fair amount of upgrade work on their new digs.
Lampert, a Realtor at Coldwell Banker, said she recently helped three of her former high school classmates become owners of a home just down the street from her.
“Three brothers decided to pool their resources and buy a house together,” she said about the siblings’ unconventional homebuying approach. "I thought it was great they wanted to live together, which allows them entry into the market. … I tell my clients to expect that their first purchase may not be their dream home.”
Lee said some of her young clients have had to rely on parents to help come up with down payments.
But, as one of her fellow Midpeninsula Realtors noted, that’s not exactly a new phenomenon.
“When I bought my first home in 1981, my parents helped me with the down payment,” said Denise Welsh, Realtor in the Los Altos office of Sereno Group, Christie’s International Real Estate.
The expensive housing market of the Bay Area in general, and the Midpeninsula in particular, has made it an even tougher entry for those who have come of age in the last couple of decades as prices have risen, Welsh said.
Of Welsh’s two millennial-aged sons, one has already become a homeowner, while the other is eager to do so. Prospective millennial buyers in the area often have had to think more creatively to get into home ownership, she said.
This includes expanding their housing search to locations in up-and-coming neighborhoods.
“I advise my clients to stay open-minded and look at the future potential of neighborhoods,” Welsh said. “I have found millennial buyers to be amazingly open to the possibilities and able to compromise on locations and individual properties.”
Elyse Barca is another local Realtor and parent of a Gen Yer who become a homeowner just before the pandemic descended upon the world in March 2020. Barca, a Menlo Park-based Realtor for Compass Real Estate, said her son and daughter-in-law, who were imminently expecting the birth of twins at the time, were able to escape a claustrophobic Mission District apartment and purchased a three-bedroom, two-bath house in San Francisco’s Sunset District on Valentine’s Day 2020.
In 2023, her view of many Midpeninsula millennial homebuyers is they are well-positioned in a high-priced market.
“My clients, now in their mid-30s to mid-40s, are often engineers in Silicon Valley high-tech companies,” Barca said. “They make high-tech salaries. Honestly, I never noticed they were not in the local housing market.”
These buyers are snapping up properties that are “done”, Barca said — updated, turnkey properties that are move-in ready.
“They do not have the time, inclination or budget to do major remodeling work,” she said. “Minor work and changes, perhaps. Well-priced, well-located properties in good condition are popular with millennials. They sell quickly.”
An 'undeniable force'
Nicholas French, a Los Altos-based Realtor for Sereno Group, Christie’s International Real Estate, said he was predicting the huge impact members of the nation’s largest age demographic would have on local residential eight years ago.
“As I said back then, this is not surprising,” French said of the real estate power of Gen Y buyers.
At one of his recent open houses, an interested visitor was a youthful-looking prospective buyer he initially regarded as a “kid.”
That "kid" turned out to have an annual income in the high six figures — a prospective buyer with great options on the pricey Midpeninsula.
“Yes, many millennials may have started in the market later, because they had to save more money for a longer period of time to come up with a down payment,” French said. “They are a force now.”
Brian Chancellor, Realtor in the Palo Alto office of Sereno Group, Christie’s International Real Estate, said this group of homebuyers is an undeniable force in the market that distinguishes itself from earlier generations of homebuyers by doing tons of preliminary research online and exhibiting a stubbornly independent streak when seeking properties -- including how people refer to them as a group.
“Don’t call them millennials,” he said, calling upon his own lived experience. “They do not like that term.”
Whether called millennials or Gen Yers, the obsessive online real estate research comes naturally to Silicon Valley residents of a certain young age seeking real estate on the Midpeninsula.
“Whether at work, or working to find a house, this is how they operate on a daily basis,” Chancellor said. “They do online research deeply and learn a great deal. They just need to know when to connect with a knowledgeable human real estate agent to get the best results.”