This year, the homeownership rate in the United States hit its highest rate since 2014 — and that’s due in large part to millennial homebuyers. This generation is growing up, settling down, and forming family groups, and its members are just as interested in the American Dream of homeownership as their predecessors.
But, of course, millennials are doing things their own way. They’re much more likely to conduct extensive research on properties and housing markets before making the decision to buy. Scarred by witnessing the mortgage crisis in their formative years, many millennials are also wary of perceived pressure from real estate professionals to purchase a home, but they’ll still expect the real estate agents and brokers handling the transaction to have answers to any questions about their future home’s current value and how that value will hold up over time.
This is where data-driven projections of value and growth come in handy: Tech-savvy millennials can peruse a home valuation at their leisure, and can absorb as much (or as little) background data and information as they choose, giving them a feeling of control and the ability to make an educated decision about their home purchase.
One of the companies serving this new group of homebuyers is Open Listings. Their all-in-one home buying site is built around a more efficient homebuying process to meet millennial home buyer expectations. This means a fully-digital, zero sales pressure experience with instant answers through their partnership with HouseCanary.
“We are privileged to partner with HouseCanary because they utilize the most accurate automated valuation model to determine single-family home and condo values, forecast 3-year returns, and set rent,” explained Kevin Miller, Director of Growth at Open Listings.
Open Listings real estate professionals use HouseCanary Value Reports to give their buyers an in-depth understanding of the property and its sales history, the ability to visualize the property’s value against 10 comparable properties, and an understanding of how the property’s value is likely to change over the next three years.
This gives millennial buyers — which comprise a large portion of Open Listings’ client base — both answers to their questions and the confidence that they’re making a solid financial decision with their home purchase. HouseCanary’s valuations are grounded in numerous data sources, including MLS listings, county assessor records, and consumer, regional, and behavioral metrics to help pinpoint the current and future value of the property. All of that information is laid out in an easy-to-understand format that can be absorbed quickly by real estate agents and their clients alike.
There are quite a few automated valuation models (AVMs) on the market today, many available on popular consumer real estate search portals — and, to some degree, they’ve earned their reputation for inaccurate results.
The difference between a widely available consumer-facing AVM and HouseCanary valuations, however, is data. HouseCanary’s real estate dataset is the most complete and robust in the industry, which is why HouseCanary has maintained the lowest median error rate in the industry — 2.8 percent, compared with a 4.3 percent error rate for the most popular consumer-facing AVM.
The HouseCanary valuation algorithm is designed to use all available market data to estimate the most likely value that a property would sell for in today’s housing environment. That’s why HouseCanary valuations can get so close to the actual sales price of the home — half of the homes valued by HouseCanary are sold for a price that’s within 2.8 percent of our valuation, while the most prominent AVM in the industry lands within 4.3 percent or more of the actual sales price of the home half the time. And HouseCanary’s Value Reports contain property background information so the recipient can better understand why one home might have a higher value than another.
By democratizing data from multiple sources, HouseCanary is helping brokerages like Open Listings give their millennial home buyers something they can’t find anywhere else — peace of mind that the biggest financial decision they’ve ever made is a good one, and enough background information to understand why their future home is valued at a certain price.
And by leveraging HouseCanary’s tools, Open Listings is reducing inbound questions and giving its agents the ability to quickly answer intricate value questions about numerous homes. Agents can send their potential or current clients a scannable, transparent report that answers many of their questions upfront, significantly reducing Open Listings’ overall customer response time for questions submitted online or over the phone.
It’s a win-win for consumers who want all the details they can gather — especially millennials — and for real estate transaction specialists who are seeking to gain a foothold in this expanding segment of the market.