Move over millennials, there’s a new buyer in town. Generation Z buyers are the newest group to hit the market.
Even though they are the first group that has never known a world without technology, their buying trends may be a bit surprising. While many may believe that this generation will turn more to technology for their home-buying and -selling needs, it turns out that this isn’t the case. According to a recent Homes.com survey, nine out of 10 Generation Z adults plan to use an agent to buy a home.
Before finding the best ways to work with this new age group, let’s break down what they want when it comes to real estate.
Who Are They?
Generation Z is classified as those born between 1995 and 2012. Currently, the oldest members of this group are entering their 20s and are beginning to think about homeownership. Because this group has never known what it’s like to live without “digital connectivity,” they are tech-savvy.
According to PRSA, members of Generation Z are more independent, educated and have an entrepreneurial drive after seeing their parents or older siblings struggle. They’re concerned about getting a college education, especially in an increasing income gap and dwindling middle class.
Another interesting factor of this group is that they are the most diverse group. In fact, 48 percent of Generation Z are members of racial and ethnic minorities. This means that they’ll likely be interested in living in a more diverse community.
Gen Z and Real Estate
When asked, almost 86 percent of Generation Z members stated that they planned to buy a home. This exceeds the current national homeownership rate, which is at 64 percent. In addition to this, they plan to purchase their first home earlier than previous groups. While many millennial buyers chose to postpone buying their first home due to financial stress, 62 percent of Generation Z buyers plan to purchase their first home before they’re 30.
When considering an agent, 27 percent of Generation Z most valued an agent who would understand them. Since there is so much information available to them online, much of this group is more interested in finding someone who can help them through the process and find a home that will best fit their needs.
It also turns out that this generation is very practical when it comes to their home-buying needs. Overwhelmingly, 71 percent stated that their top priority was the home’s proximity to work. Secondary to this was proximity to family and friends, and then followed closely by an area with a low crime rate. Also, because it is such a diverse population, 58 percent have a strong desire to live in a culturally diverse community.
While Generation Z is generally committed to buying a home, they also face struggles. In a struggling economy, while millennials focused on the difficulty of saving for a down payment, the main concern of Generation Z buyers is making enough income to afford a home. This is especially true, since the cost of homes is increasing at a faster rate than entry-level job salaries. This generation also seems unaware of government assistance programs, as many expect to save for about three years to make a down payment. The majority also believes that they need to have at least 11-19 percent of the home’s price for their down payment, which may end up slowing down their home search.
If you’re interested in pursuing this group of homebuyers, be sure to catch our next article, where we’ll detail the best ways to work with Generation Z buyers. While those Generation Z buyers are looking for their future homes, they’re going to need an agent. Programs such as Homes.com’s City Sponsor Ads allow active buyers searching for a home online to interact with you. By prominently displaying your listings among the first search results in your city, your listings will be in a great position to sell.