Could Gen Z Reshape Real Estate?
Some in the housing industry are already looking beyond the millennials to see how the generation coming up behind it will impact the housing market.
Read more: The Wish List of Your Future Buyers: Gen Z
Currently called generation Z – comprised of teens currently aged 13-17 – analysts say the group could be a new paradigm for the real estate market – "a generation whose entire world and self-views are crafted by technology, immediacy, and access," says Sherry Chris, president and CEO of Better Homes and Gardens Real Estate LLC. Better Homes and Gardens has conducted surveys into the housing tastes of this generation.
Ninety-seven percent of about 1,000 gen Z teens surveyed believe they will own a home in their lifetime. Four out of five say that home ownership is the most important factor in achieving the American dream, according to the Better Homes and Gardens survey.
"They recognize that home ownership is a sound investment and believe that it is more secure than the stock market," says Jamie Gutfreund, CMO at Deep Focus, a global marketing agency that has also studied gen Z consumer trends and behaviors.
They’d make big sacrifices to get home ownership too. 53 percent say they’d be willing to give up social media for a year if it meant getting their ideal home in the future. They’d also be willing to complete twice as much homework every night (53%), go to school seven days a week (42%), and even take their mom or dad to prom (39%), all for the sake of owning a home.
But before they’ll be ready to purchase their first home, gen Z teens say they plan to reach certain milestones in life first, like earning an advanced college degree (60%), getting married (59%), owning a pet (58%), and having children (21%).
They will likely have deep preferences for the suburban lifestyle, like previous generations. Forty-seven percent say their future home will likely be located in a suburban neighborhood. Generation Z teens also say they want to stay near to where they grew up, but only 17 percent believe their ideal home would be located in the same town.
Gutfreund says he believes they will favor more modest, functional houses, however. "I see the two biggest priorities for this generation to be home buying and travel," Gutfreund says. "I suspect this generation will focus on homes that will allow them to live their best lives, but to be within their means to allow for financial freedoms to travel the world."
Their gravitation to the digital world will likely have a huge impact on how they shop for homes. Ninety-five percent say they’d take key steps in the homebuying process online, with viewing home listings and taking virtual tours identified as the top behaviors they’d take. But they’ll still likely call on real estate agents for help. Nineteen percent say they’d likely purchase a home online, while 81 percent said they’d use more traditional methods, like working with a real estate agent, to buy their future home.
"With every new generation of consumers that enters the real estate industry, we as professionals must extend our boundaries," says Kevin Woody, CEO of Better Homes and Gardens Real Estate Go Realty. "What makes generation Z unique goes beyond the fact that we must find new and better ways to service a tech-savvy generation: We had that charge with millennials. The gen Z imperative is more complex: cultivating and encouraging conservative financial values embodied in future consumers who have known nothing but technology innovation in every area of their lives."
Source: "Gen Z in the House: The Future of Real Estate," RISMedia (Feb. 8, 2015)