Gen Z: Clients Of The Future
Andrew Dehan6 minute-read
PUBLISHED: September 24, 2021
As millennials step into middle age, a new generation of first-time home buyers is on the horizon: Generation Z. This generation, now entering their mid-20s, has a different perspective from the millennials who preceded them.
Let's talk about who Gen Z is, how you can market to them and what they want in a home.
Who Is Gen Z And How Are They Different From Millennials?
Defined broadly, Gen Z – also known as "zoomers" or the "digital generation" – includes anyone born between roughly 1995 and 2015. With the older members of this generation firmly in their mid-20s, many of them are putting down roots in adulthood. They're on track to be the most diverse and best-educated generation yet, according to the Pew Research Center.
If baby boomers had color TV, Gen Xers had MTV and millennials had the iPod, then Gen Z has the smartphone. Technology, computers, the internet – all have been part of their lives since birth. This means a couple things: they're incredibly connected with the world socially and they have answers to everything at their fingertips.
While they may have student loans, the major problem that hit millennials and set them back – the great recession of 2007-2008 – has not happened to this generation. Instead, they've had to deal with the COVID-19 pandemic, which has yet to show the same deterrent effect in home buying.
Generation Z Wants To Purchase A Home Now
According to Rocket Homes℠ research, 73.1% of Gen Zers want to buy a home in the next 10 years, with 44.6% of those saying they want to buy in the next 5 years. To back that up, a 2018 REALTOR.com® study found Gen Z was serious about planning for homeownership, stating that they're two times more likely than previous generations to be saving or planning on saving for a home by age 25.
But planning for a home and buying one are two different things. Unlike previous generations, Gen Z is much less interested in achieving the so-called American dream. Instead, they're more interested in the independence and customizability that comes with being a homeowner.
Gen Z's Home Buying Challenges
The same Rocket Homes research found that 73.9% of surveyed Gen Zers said their biggest obstacles for home buying were financial. That 73.9% percent breaks down into:
- 21.9% worrying about not having enough for a down payment
- 18.4% unsure if they'll find a home in their price range
- 16.1% worried about not having good enough credit
- 10.5% afraid they have too much student loan debt
- 7% intimidated by the mortgage qualification process
On top of finances, 20.8% of Gen Zers said they didn't know where to begin with home buying, making the idea overwhelming. By knowing these obstacles, you can begin to address them and better market to potential Gen Z home buyers.
Are your clients worried about affordability or rising home prices? Maybe you can help them uncover a home that works with their budget. Are you selling a great fixer-upper or starter home? Try catering your listing to a younger demographic.
How Real Estate Agents Should Market Homes To Gen Z
To reach this generation, real estate professionals need to understand how they view the world. Most Gen Z buyers are first-time home buyers and may need more help with the home buying process. That does not mean they're uneducated, however. Chances are they've spent a lot of time online researching the process and deciding what they want.
Whether you're working to buy or sell a home, understanding where Gen Z is coming from will set you up for success.
Create A Credible Online Presence
Gen Zers have never experienced a world without the internet, and many of them haven't experienced anything less than high-speed broadband. Chances are, before they contacted you, they searched you online.
Not only do you need a website, but the site needs to be optimized for mobile. Most Gen Zers access the internet primarily through their smartphones. Real estate professionals who want to stay relevant should optimize their internet presence for mobile browsing. In fact, according to research from the National Retail Federation, over 60% of Gen Zers said they wouldn’t use an app or website that loads slowly or is difficult to navigate.
Creating a credible online presence is the first step to winning over Gen Zs confidence. If you're not online, they may not bother. They want to read honest reviews and be able to put a face to a name.
Use Social Media And Content Marketing
If millennials killed traditional advertising, Gen Zers never connected with it to begin with. Billboards, TV and print ads won't reach this generation. If they even see it, it will come across as dated and inauthentic. Instead, you need to capitalize on the internet and use it as a way to build your brand.
Along with having a helpful website, using social media to market yourself and your work is essential. Virtual tours on Facebook, Instagram, and/or YouTube or videos interviewing previous clients will do a lot to bolster your presence online.
Creating educational content is another way to grow your presence. A survey by Freddie Mac found that 65% of Gen Zers don’t feel confident about their knowledge of the mortgage process and that 54% would turn to the internet to learn more.
Adding educational content can help you reach even more Gen Z home buyers and establish you as a subject matter expert in the field. You can share this content on multiple platforms. Cater to a wider audience on Facebook and build your professional presence on LinkedIn.
This educational content can be through videos and interesting infographics shared on social media, or through blogs and guides. Remember, Gen Z finds old marketing and advertising phony. They want you to give them something a value to build trust and prove you're the right agent for the job. You do this by marketing yourself and your knowledge.
Gen Z is used to immediate communication. While it can be difficult to always respond quickly when working with several different clients at a time, you need to get back to all your clients’ queries in a timely manner. Even if it's just a quick update text, they will appreciate the contact.
In fact, texting is often the best way to contact Gen Zers, especially if it's quick or you have a simple question. Keeping the lines of communication open and being transparent about where things are in the process will help build their trust and satisfaction.
Contrary to popular belief, Gen Z doesn't always want to do things via text. When it comes to carrying out the process of buying a new home, this digital generation prefers face-to-face interaction.
As mentioned before, Gen Z is the most diverse and educated generation in the history of us measuring diversity and naming generations. Social consciousness is a big deal for this generation. They prefer working with businesses and brands that reflect their values. Be sure to be inclusive to people of all races, ethnicities, genders, identities and backgrounds in your interactions and marketing.
Remember that with every client, you’re working with an individual, not an entire generation. While the advice listed here can help you understand where they’re coming from, the most important thing you can do for your Gen Z clients is to build a rapport and understand them on an individual level.
Know What They Value In A Home
Where millennial home buyers may be looking to upgrade their current home and looking for a good school district, what Gen Z values can be different. Here's a few features they may be more likely to be interested in.
Many Gen Zers prefer amenities for outdoor entertaining, especially since COVID-19 has made outdoor activities practically necessary for safe social engagements. Chances are they may prioritize places with patios, decks, porches or fire pit areas.
Many Gen Zers see climate change as one of the major challenges the world faces and may be willing to pay more for eco-friendly products. This interest spills over into what they prefer in a home. Sellers can make homes more energy-efficient by installing two- or three-pane windows, sealing off drafts or installing Energy Star appliances.
Smaller Houses With Open Layouts
Open layouts are optimal for entertaining. They can also make smaller homes look bigger. With Gen Zers preferring smaller houses, open floorplans can be a plus. An open floorplan can make a home really standout in a crowded housing market. Gen Zers aren’t the only home buyers seeking this type of design in a new home.
Bottom Line: Get Ready For Gen Z
Economists and research centers all over are studying Gen Z, predicting how they will fare in today's housing market. With mortgage rates still extremely low, now could be a great time for the older members of Gen Z to buy a home. They face challenges like rising home prices and uncertainty around their finances.
Building an educational presence online will help ingratiate you with Gen Z, as well as show you're an expert in the area. Videos, social posts and blogs can help build trust. Remember, they're probably looking you up. Whether they're ready to buy a starter home today or their dream home in 5 years, your presence online will help you make a connection.
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