Agents need to better understand the particular needs and aspirations that buyers have when it comes to homebuying in order for the process to be smooth. That may be even more true when you’re dealing with younger clients, specifically those in the Gen Z demographic (born mid-1990s to mid-2000s).
This blog entry lays out the homebuying concerns that Gen Zs have, as well as how they stack up against other age demographics like Generation X. We’ll also provide tips on how to better serve this age group effectively. If you’re part of the TL; DR crowd then start your free seven-day trial of AgentEDU today and watch our dedicated track, “Representing Buyers.”
Gen Z’s homebuying obstacles
In a recent survey by PropertyShark, 83 percent of Gen Z respondents said they see themselves entering the real estate market within the next five years. This comes on the heels of approximately 100,000 Gen Z homebuyers. That figure is only posed to increase; however, it doesn’t come without some potential roadblocks. A notable takeaway from the survey is that Gen Z sees student debt as their biggest obstacle, with almost a third (32 percent) stating it’s their biggest obstacle to buying a home. This is a significant contrast to the only 7 percent of Gen Xers who reported the same issue.
The second largest obstacle for Gen Zs is coming up with a down payment for their home. This is an area that many age demographics agree is a roadblock, as 31 percent of Gen Xers and 35 percent of millennials reported the same. Interestingly, unlike Gen Xers and millennials, Gen Z does not see increasing home prices as a significant obstacle in buying a home. While 14 percent of Gen Xers and 13 percent of millennials see this as a potential roadblock, only 5 percent of Gen Z reported the same.
Another brighter side for Gen Z is that only 1.2 percent of Gen Z homeowners are more than 60 days late on mortgage payments. This compares to the 1.6 percent of baby boomers and millennials and 2.3 percent of Gen Xers.
Gen Z aspire to different things
Gen Zs have a different aspirational lifestyle compared to millennials. One area of difference is the amount of space they want; where Gen Z wants their homes to be 2,081 square feet on average, that’s 200 feet more than millennials.
Other areas in a home search that Gen Z value are: location, parking spaces, lifestyle amenities, smart appliances and smart homes. The report went onto state, “Considering the youth of Gen Z, the importance of smart systems is likely to increase as more of their cohort enters the housing market.”
One area that may spell bad news for smaller, rural markets, is the urban lifestyle that Gen Z aspires to. In a similar response to millennials, 30 percent of Gen Z say they want to live in large metro areas whereas 60 percent want to live in suburban areas, leaving only 10 percent for rural markets. Living at home is still what’s most practical for many millennials and Gen Zers; they’re doing so while also saving money to afford their own home. The report found that 40 percent of Gen Z respondents said the biggest reason they stay home is to save up money.
In all, Gen Z is considered the most optimistic about owning a home while also getting the lifestyle they want. Although they’re coming into the homebuying process with extra baggage, and specific desires, as an agent you can adapt to every buyer’s needs. Moreover, communication is key in not only establishing common ground with your Gen Z buyer but also helping them keeping their options open with flexibility.
Understanding their obstacles and formatting your services to better assist a Gen Z buyer can make the process much smoother, which can also lead to future contacts via recommendation. To learn more about better representing your buyers and best practices for any situation, begin your seven-day free trial of AgentEDU and gain access to our essential, “Representing Buyers” track.