A generation that has seen financial turmoil with a vision of opportunity. Tens of millions of people coming of age in a world impacted by politics and a global economy. Non-conformists and a major force for social change in the United States. Independent spirits that have and will continue to influence all aspects of society. Change makers grounded in values. We must be talking about the baby boomers, right? Not so fast … there is another generation booming through the generational ranks with very similar characteristics, but with a new set of resources that will make their influence outweigh their size—we’re talking Generation Z.
At nearly 21 million strong, Generation Z teens, ages 13-17, are a group of young people whose every move has been chronicled on social media. They know how to buy any item with the click of a button; and they have never known a world without instant access to any piece of information. They are socially aware, both in the human and media sense, economically watchful and technologically advanced. They don’t just represent the future, they are creating it.
So how will this generation affect the future of real estate? Better Homes and Gardens® Real Estate decided it was time to find out. “We helped usher the conversation about millennials into the real estate industry,” says Sherry Chris, president and CEO, Better Homes and Gardens Real Estate LLC. “In many ways, millennials are the last bridge generation between today and tomorrow. Gen Z is a new paradigm: a generation whose entire world and self-views are crafted by technology, immediacy and access. To prepare for this, we shifted our discussion—and our gaze—further into the future.”
“Gen Z is the tsunami behind the millennial wave,” says Jamie Gutfreund, CMO at global marketing agency, Deep Focus, and the driving force behind the Cassandra Report that has heralded Gen Z consumer trends and behaviors. Gutfreund specializes in generational behavior and helps companies develop innovative products and breakthrough marketing and digital strategies based on those insights. “This generation’s demonstration of teen rebellion is not in an effort to be reckless, but to evoke positive change and purpose based on deep-rooted knowledge. They don’t make the distinction between the physical and digital world. It’s all the same to them.”
Recent survey results from Better Homes and Gardens® Real Estate illuminated that 97 percent of Gen Z teens believe they will own a home in their lifetime and four out of five indicate homeownership is the most important factor in achieving the American Dream. “They recognize that homeownership is a sound investment and believe that it is more secure than the stock market,” adds Gutfreund.
Furthermore, more than half of respondents (54 percent) do not believe they will achieve millionaire status in their lifetime, giving us a first-hand view into the perspectives and priorities guiding this generation. According to Gutfreund, the definition of success for Gen Zers is not dictated by money, but rather independence. They are realists who possess a deep understanding of today’s social and economic issues. This generation is unafraid to challenge the status quo—not for attention—but to make the world better. Their parents are empowering them to gain knowledge and are not threatened by the fact that their children are listening not only to them, but to the entire world.
One would have thought that Generation Z would be negatively impacted by witnessing the impact that the Great Recession had on their families or even that of their friends. When the U.S. housing market went from boom to bust and the U.S. labor market lost 8.4 million jobs, or 6.1 percent of all payroll employment according to the Economic Policy Institute, the U.S. experienced the most dramatic employment contraction since the Great Depression. Those who were raised in the 1930s were strongly molded by the Great Depression and carried an overly thrifty attitude throughout their entire lives as a result—we are seeing a similar type of generational trend today.
It turns out for Gen Z teens, the old adage that “a penny saved is a penny earned” rings true, and as such, they understand the value of saving. Sixty-one percent of respondents have already begun saving money in their young lives. In fact, 51 percent of the teens surveyed believe they know more about saving money compared to their parents at the same age. Of that group, 65 percent attribute this belief to discussions they’ve had with their parents about saving and 41 percent give credit to learning about the economic recession in school.
“These findings show how the American Dream of homeownership is hardwired into our cultural DNA,” says Joseph Rand, managing partner, Better Homes and Gardens Real Estate Rand Realty. “The press seemed more interested in covering the pitfalls of the real estate market as this generation came of age, but Gen Z has demonstrated that they have taken a positive stance as a result of all that has transpired. You don’t often think teenagers are looking past their weekend plans, but they see themselves owning a home, which in a way, is a major blow to the hot, trendy concept of a shared economy—renting, group purchasing—as it relates to homeownership.”
What a Teen Wants
While Gen Z teens are living in a “get it now” society, they expect a certain traditional progression as they look to achieve their goals. Before they purchase their first home, survey results reflect that they plan to hit certain milestones, such as earning an advanced college degree (60 percent), getting married (59 percent), owning a pet (58 percent) and having children (21 percent).
While Cynthia Cannon, 16, is focused on college at the moment, she has already started saving and has thought about her future as a homebuyer. “I’d like to live in the city at some point during or after college, but when I get married, I’d like to buy a house in the suburbs and raise my kids there. I don’t need a big house, as the people in a home are the most important aspect of it. Anyway, location is everything, right? If you live in an awesome house, but it’s in a bad area and you can’t get to anything, what’s the point?”
To Gutfreund, the notion of more modest, functional houses fits in line with her research. “I see the two biggest priorities for this generation to be home buying and travel. I suspect this generation will focus on homes that allow them to live their best lives, but to be within their means to allow for financial freedom to travel the world.”
While city living tends to appeal to young generations looking for a variety of career, entertainment and social opportunities, nearly half of respondents (47 percent) say their future home will most likely be located in a suburban neighborhood. Gen Z teens want to stay fairly close to where they grew up, but only 17 percent believe their ideal home would be located in the same town.
It’s common knowledge that social media and immediate contact are lifelines for Gen Z, so much so that texting and instant messaging are now more the norm than phone calls. So how much does their desire for homeownership compare to their need to be connected?
Remarkably, 53 percent of respondents would be willing to give up social media for a year if it meant getting their ideal home in the future. Yes, the fervent Instagrammers of today would actually give up social media for their homes of tomorrow. They are also overwhelmingly willing to do the “unthinkable,” such as completing twice as much homework every night (53 percent), going to school seven days a week (42 percent) and even taking their mom or dad to prom (39 percent)—all in the name of owning a home.