Just when you thought you’d mastered marketing to Millennials, it’s time to prepare for a new generation of buyers: Gen Z. According to realtor.com® Q4 Generational Propensity Report, these Tech-savvy adults now own about 2% of the homes on the market.
So what does this mean for real estate agents? Along with the obvious advice to jump on the TikTok bandwagon to get in front of these consumers, Gen Z’s desire to get out of big cities and enter urban and suburban markets could mean a growing need for real estate agents in these areas.
Here’s a look at what to expect from this emerging population.
What can Generation Z afford?
Realtor.com® recently revealed that Gen Z is poised to overtake Gen Y in purchasing power.
Jason Dorsey, president of the Center for Generational Kinetics (a Gen Z and Millennial research company), said that in December 2020, Gen Z was spending a median price of $ 106,600 on starting homes.
That number is 37% less than what Millennials currently spend and 46.5% less than the national median of $ 300,000. But that’s an 11% jump from what Gen Z shoppers spent the year before.
Another defining feature is a lower down payment than their Millennial predecessors or Gen X parents.
Instead of the traditional 15% to 20% down payment, Gen Z pays 5% just to get their foot in the door despite the higher monthly payments.
Where are Gen Z looking to buy?
In 2020, Gen Z homebuyers took out the most mortgages in Toledo, Ohio, a much more suburban environment than their millennial counterparts. Other cities that saw an influx of Gen Z home buyers were Grand Rapids, Wichita, Virginia Beach, Winston-Salem, Scranton, Oklahoma City, Cincinnati, and Baton Rouge.
Most are college towns with strong local economies, suggesting that this first wave of Gen Z homebuyers tend to settle in the same town where they attended college.
How to connect with Gen Z homebuyers
If you’ve guessed that the best way to connect with Gen Z is online, you’ve guessed correctly.
While they have this in common with Millennials, Gen Z shoppers are even more entrenched in online content and tend to trust those who position themselves as “influencers”.
To gain their trust, regularly introduce yourself on platforms like Instagram, TikTok, and Snapchat with convenient, small-sized content.
Content can include topics such as how to save for that first down payment, an explanation of the loan process, and other tips that help “demystify” the home buying experience.
If you want to work with this demographic, don’t be afraid to think and create outside the box.
As a member of the Colibri Real Estate family of leading educational brands, McKissock Learning helps hundreds of thousands of real estate professionals each year achieve lasting success at every stage of their careers through continuing education courses and professional development. Learn more about mckissock.com/immobilier.