Real estate agents eye Generation Z as future of industry
When you think of the average household, you typically draw up the image of two parents, 1.5 kids, a pet and a nice yard. But some real estate agents are already moving beyond this traditional idea and targeting their buying and selling strategies toward a new cohort of potential homeowners: Generation Z.
Generation Z is classified as anyone born after the year 2000, meaning today's current teenagers. And while homeownership may not even be on the radar of many middle- and high-schoolers, it will be someday soon - and that's what the industry is seeking to get ahead of. By understanding the dynamics driving future prospective homebuyers and the values they attribute to homeownership, agents, investors, local governments and contractors can effectively meet demand head on.
What Generation Z could mean for homeownership
The National Association of Realtors gathered promising feedback from its recent expo held earlier this month. The organization instituted a panel of five post-millennials aged 14 to 18 to field questions related to their lifestyle habits, future goals and their overall expectations for homeownership.
In many ways, Generation Z may be more conventional than originally thought. NAR gathered data from Better Homes and Garden Real Estate and found 97 percent of "Zs" are keen on buying a home at some point in the future. Additionally, 82 percent tie homeownership to the idea of living the American Dream.
These aren't pie-in-the-sky desires either. Today's youth have experienced a sharp downturn in the economy, relatively stagnant wages and the prospect of significant student loan debt - and yet, they're still hopeful. This could be a sign that Generation Z is well-aware of what their parent's generation went through economically and is focused on being more financially savvy and independent. At the end of the day, owning real estate is one of the best financial decisions anyone of any age can make, and with younger consumers hip to this idea, the real estate industry may be in for big changes in the years ahead.
What Generation Z wants
Unlike millennials, who are older and already part of the workforce, Generation Z views homeownership as a primary goal. As Time Money reported, this is likely due to the fact that Generation Z was too young to truly understand the ramifications of the housing crash in 2008-2009. They still view the home as a source of security and stability, not as a symbol of potential financial ruin like some millennials do.
This can be seen in the high levels of rentership within the millennial generation. Even couples in their 30s with several small children are still eschewing homeownership, which could be out of fear or the perceived debt they would incur to make a down payment.
This sentiment has largely bypassed post-millennials. Generation Z has less credit card debt than millennials, and their parents have likely recovered from the recession financially. This sense of well-being carries over into real estate and retirement goals, with Zs placing higher value in financial smarts.
Time indicated that half of today's teens stated they would complete twice the amount of homework and give up social media entirely for a whole year if it meant they would be able to purchase a home when they grew up. Such aspiration may be a bit difficult to quantify in real-world terms, but the desire is still there.
One of the key points that stood out in the NAR panel of post-millennials was that America's youth prizes square footage. They want enough room for their own kids to grow up, to have new features and appliances, and the satisfaction of simply having a "big house."
Brooke, a 17-year-old panelist, stated she already knew precisely what she wants to see in her home because she watches HGTV and understands what modern decor and design should adhere to.
Sherry Chris, CEO of Better Homes and Garden Real Estate, noted researchers already know enough about millennials, according to NAR. The studies and demographics are well-documented, yet for Generation Z, the information available is still scarce.
"Generation Z are the teenagers of today that will shape - and are already starting to - the way we live, the way we function and the way we do business."
What's an agent to do?
Post-millennials typically get a bad rap for valuing only electronics, touchscreens and digital interactions, yet NAR found this is a misconception when it comes to real estate.
Thomas, a 12-year-old panelist, admitted that he will likely begin his real estate search online yet he still recognizes that a true professional is the way to go.
"Real estate websites may not be as accurate as an expert's opinion, and you are spending too much money on a house to not have accurate information," said Thomas. Wise words indeed!
Other Zs interviewed by NAR indicated they will probably continue to use social media platforms like Instagram, Snapchat and Twitter, but not Facebook (it's too outdated and primarily used by adults). What's more is that, post-millennials are quick to admit their attentiveness to smartphones, which means real estate agents will have to work even harder to divert their attention to real-world matters at hand. Or, find a way to input valuable housing advice straight into the very apps and devices today's youth use.
In either case, it could be an uphill climb for professionals working in real estate, especially those in dense, urban centers that are likely to see a rise in Generation Z residents in the years and decades ahead. The key will be to start shifting resources and knowledge toward more digital efforts to truly reach a younger, more diverse and tech-savvy audience. Then, once a conversation has begun, agents must have the personal touch and professional experience to push younger buyers through the buying process.
This could entail building out new digital platforms and real estate advice apps.
Real Estate News brought to you by 2M Realty, a true expert in the online real estate market.