MILLENNIALS DEMAND VIRTUAL TOURS
Published Date 4/6/2018
For all the fanfare about how millennials were poised to be the biggest home buying generation yet, there are still a few things that have to 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, head to the movie-plex for Spielberg’s Ready Player One.)
Let’s face it. The millennial generation grew up with computers as appliances and 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 as a means 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.
And 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 by the use of 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 are able to 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 we said, 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.
Source: Forbes and TBWS