Don’t blink, because Millennials are about to lose their title as the “darlings” of the real estate industry. Gen Z home buyers, from 1996 to the present, are large and ready to take charge, according to a number of studies.
By next year, Gen Z home buyers (whose oldest members will be 23 years old this year), will make up about 25 percent of our population and a big chunk of first-time homebuyers.
In fact, a Bank of America study finds that a majority of Americans age 18 to 23 say they will buy a home within the next five years.
Easy for them to say, right? But here’s a tip: this cohort is nothing like their predecessors, Millennials. They have the money to back up the talk; they’ve already started saving for a home.
Since the typical REALTOR® is 53-years-old, that makes you either a member of Gen X or a boomer, depending on whose demographics you use.
Members of the latter make up 60 percent of all U.S. grandparents, according to the Census Bureau and, lucky you, if you’re among them, because you most likely have a handle on Gen Z – they’re your grandkids.
Just who are Gen Z home buyers?
Gen Z home buyers, by and large, are the grandchildren of baby boomers. Gramma and Grandpa are the folks who hung out in the mud on Max Yasgur’s New York dairy farm just for a chance to hear the most amazing rock legends ever.
It’s the group who, when younger, protested wars, participated in civil rights marches, tuned in or dropped out and ushered in the sexual revolution.
And, all of this history has been passed on by what has become known as the most active grandparents in our country’s history.
It’s no wonder then that members of Gen Z, also known as “digital natives,” have more in common with the baby boomer cohort than millennials. And, that’s a good thing for the real estate industry.
What are they like?
Members of generation Z are being called everything from the “super entrepreneurs of tomorrow” to “technological savants.” Making money and doing it with a business of their own is top-of-mind for many.
Like their grandparents, members of Gen Z are non-conformists. Unlike their parents, they are already saving for retirement.
Nearly one-fourth of the members of Gen Z had a savings account before they turned 10 years old, according to the Center for Generational Kinetics (CGK)
Where are they getting the money to stash away? “Nearly a quarter of Gen Z is working a part-time,” according to the Center for Generational Kinetics. “23% does odd jobs and other short-term work, and 22% earns allowance with chores and other responsibilities.”
Gen Z: what they want in a home
The “American Dream” includes homeownership, according to a CGK study of Generation Z. Nearly all of them who responded to a Better Homes & Gardens® survey say that owning a home is on their bucket list.
Check this out, though: slightly more than half say that they would give up social media for a year or do double the amount of homework each day if it would help them buy a home. An additional 42 percent said they would attend school seven days a week if it helped further their dream of owning a home.
These are some highly motivated buyers
When they shop, they look at starter homes. Remember, they’ve scrimped and saved and they aren’t about to stop being fiscally responsible at this point. Some studies say that the “small is better” mentality also extends to the families they plan on having.
They do expect that technology will be integrated into their homes, something that may turn out to disappoint them when they tour the typical starter home.
Best of all, for the agent, at least, is that you can count on your Gen Z buyer to have thoroughly researched neighborhoods and taken virtual, 3-D tours of homes in the chosen neighborhoods.
Their research is so thorough, in fact, the average time it takes them from first home toured to under contract is less than one month.
How to reach them
Forget about Facebook ads; “Gen Z views Facebook as being for older generations,” according to research performed by CGK.
Snapchat and Instagram are their go-to social media platforms. Apps that allow them more personal privacy, are “more instantaneous … and more visually appealing” attract members of Gen Z.
Your testimonials, Zillow and Yelp reviews mean nothing to them; they trust their friends’ opinions far more than online reviews. So, once you work with one, ensure that you stay top-of-mind to snag those referrals.
Beef up the neighborhood pages on your website and start or join neighborhood groups on social media. These are the places that Gen Z looks for information.
While they even consider Millennials “old,” anyone who reminds them of their best friend while growing up – Grandma or Grandpa – will have a leg up on the competition. Remember, your two generations are the most similar in all the ways that count.
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