Just when you thought you had mastered marketing to millennials, it’s time to prepare for a new generation of homebuyers: Gen Z.
According to Realtor.com’s fourth-quarter generational propensity report, these tech-savvy adults now own about 2% of the homes on the market.
And, unlike their millennial predecessors, Gen Z desires simplicity, practicality, and they’re more focused than the previous generation on low-cost living outside of big cities.
So what does that mean for real estate agents?
Besides the obvious advice to jump on the TikTok bandwagon to get in front of these smart consumers, Gen Z’s desire to get out of big cities and into urban and suburban areas could mean a growing need for real estate agents in these areas.
Here’s a snapshot of what to expect from this emerging homeowner demographic, according to Realtor.com.
What Can Gen Z Afford?
In one of their latest articles, Realtor.com revealed that Gen Z is poised to surpass millennials when it comes to spending power.
Jason Dorsey, President of the Center for Generational Kinetics, which is a Gen Z and millennial research firm based in Austin, TX, says that as of December of 2020, Gen Z was spending a median price of $106,600 on starter homes.
That number is 37% less than what millennials are currently spending and 46.5% less the $300,000 national median, but it’s an 11% jump from what Gen Z buyers spent the year before.
Another defining Gen Z homebuyer characteristic is a lower down payment than their millennial predecessors or Gen X parents.
Rather than putting down the traditional 15-20% down payment like their parents did, Gen Z home buyers are putting down 5% just to get their foot in the door despite the higher monthly payments.
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Where Are Gen Z Homebuyers Looking to Buy?
In 2020, Gen Z homebuyers took out the most mortgages in Toledo, OH — a much more suburban environment than you might find their millennial counterparts. Other cities that saw an influx of Gen Z homebuyers were Grand Rapids, Wichita, Virginia Beach, Winston-Salem, Scranton, Oklahoma City, Cincinnati, and Baton Rouge.
The theme? Most are college towns with strong local economies, suggesting that this first wave of Gen Z home buyers tend to settle down in the same city where they attended college.
How to Connect With Gen Z Home Buyers
If you guessed that the best way to connect with Gen Z homebuyers is online, you guessed correctly.
While these younger buyers have this in common with millennials, Gen Z buyers are even more entrenched in online content and tend to trust those who position themselves as “influencers” in their industry — and real estate is no different.
To earn their trust, show up consistently on platforms like Instagram, TikTok, and Snapchat with bite-sized, practical content.
Content can include creative options for financing, how to save for that first down payment, explaining the lending process, and other tips that help “demystify” their first home buying experience.
In other words, if you’re interested in working with this demographic, don’t be afraid to think and create outside the box.