Last Updated on July 20, 2023 by Luke Feldbrugge
Working with Gen Z clients has recently become a bigger topic with real estate agents. Agents are learning what these young people want, what they don’t want, and their expectations about buying a home. They will, of course, be shaping the real estate industry for the next few decades. If you want to get in on how to work with Gen Z clients at the ground level, here’s a primer on what to expect.
First off, if you plan to be working with Gen Z clients, it’s good to get a sense of Generation Z’s expectations for their first starter homes. There are a couple of points of research that don’t exactly agree. One says the majority of the oldest members of Gen Z expect to buy their first home in the next five years. Other survey research more conservatively states that 86% of these young people say that they want to buy their first home before the age of 35.
Industry professionals should be encouraged by the future. This generation is eager to find their first home. That’s the conclusion made by one of their own, Ally Carty.
Who is Generation Z?
Let’s do the numbers. Generation Z consists of those born between 1997 and 2012 (give or take a year). That means they are currently ages 11 to 26, so only the leading edge of this generation is going to be thinking about housing right now. As a group, Z is not the largest generation, but they are close on the heels of Baby Boomers with about 72 million members. Just based on the numbers alone, unless your real estate business is focused on a niche that does not include this generation right now, you will definitely want to better understand what it’s like working with Gen Z clients.
Since this is the newest generation on the scene, a complete picture of them hasn’t yet been developed. This is what we know so far. Also, any analysis of an entire generation of 70 million people will necessarily be full of generalizations. That’s the only way to build a profile of Generation Z, with the understanding that we are describing a large new generation of homebuyers.
When it comes to communicating and working with individual Gen Zers, our best advice is to use these descriptions as filters to help you understand them. Always start with your own abilities and skills, first, and use these characteristics to help you tweak your message.
Realize 6 Characteristics When Working with Gen Z Clients
Gen Z is Connected
Every generation has their signature media. With Boomers it was TV. With Generation X it was PCs and the beginning of the Internet. With Millennials it was social platforms and mobile devices. For Generation Z, their media is the full range of digital communication and entertainment. Now, the advent of AI is poised to change their views on life, work and the world around them. People like to call them the first generation of Digital Natives, and that’s not far off. They don’t remember a time when digital media wasn’t a central part of their lives. So, you may want to consider upping your digital communications and media game when working with Gen Z clients.
What does that mean for the real estate industry? First, your online presence must be strong…very strong. That doesn’t mean just a website or Facebook page; it means social media accounts such as Instagram, TikTok, mobile apps and a dozen other technologies that haven’t been invented yet. Wise elders used to caution businesses about jumping too early onto a new technology. Those days are past. Tom Peters summed it up well for the digital age: “Test fast, fail fast, adjust fast.”
That said, this generation of first-time homebuyers isn’t abandoning real estate professionals. At a conference in 2016, a survey revealed that 97% of Generation Z expect to own a home in their lifetime and 81% will ask for help from a real estate agent. This is another “both/and” situation where you will need to provide lots of digital tools and traditional marketing tactics when working with Gen Z clients.
They are the First Truly Global Generation
Being embedded into the digital world has given them access to the world. As global citizens, their options have been expanded. This outlook has also made them very aware of climate change and how everything affects it. In addition, they will be super aware of environmental solutions that can be put into place.
That means when you are working with Gen Z clients and showing them houses and properties, they are likely to want all the information about the energy efficiencies and alternatives available to them. Three bedrooms? Great. Solar panels tied to the grid? That may be much more important for go your Gen Z home buyers.
“73% of Generation Z are willing to pay more for sustainable products.”
Tend to be Pragmatic and Entrepreneurial
Many generations have had singular events that have shaped them as they grew up. For Boomers it was the assassination of JFK. For Xers it was the Challenger Disaster. For Millennials, it was 9/11, and for Generation Z it was the pandemic. Growing up in a world of economic and political uncertainty has made them highly pragmatic and focused on building a better future for themselves. They are also more likely to start their own businesses than previous generations.
Pragmatism is almost always an asset when you are helping individuals find and afford a new home, and this is likely to be the case when working with Gen Z clients. Compromises are part of the process – from negotiating an offer to signing a mortgage – and pragmatic people know that. They don’t get caught up in what’s “supposed” to happen and deal with the issues as they are. That helps with their decision making.
An entrepreneurial approach to their future can also be a bonus if you are a real estate agent working with Gen Z clients. They will probably be able to stay optimistic in the face of setbacks. Folks that start their own business are also more determined to succeed and less afraid of risk. Together these characteristics are going to make the real estate experience much more positive.
Generation Z is Diverse and Inclusive
The trend toward more diversity has been progressive in each generation. From the Boomers all the way to the Millennials, young people have been becoming a more diverse population that is increasingly more tolerant. That’s especially true for Generation Z, which is the most racially and ethnically diverse generation in American history. Their acceptance includes differences in gender identity and sexual orientation more so than previous generations.
No surprise then that:
“58% of those surveyed said that being a part of an ethnically diverse neighborhood is a priority for them.”
If you are a real estate agent working with Gen Z clients to find a home, homogenous areas aren’t a plus for today’s young people. They want to be part of an inclusive community.
Gen Z is Politically Engaged
Experts are projecting that Generation Z is more politically engaged than previous generations, with many young people getting involved in social and political causes. Their early years, Generation Z saw what happened with the Great Recession followed by the pandemic, and they will be eager to flex their voting power to change what they see as a broken system.
And because they will represent an increasing number of voters, politicians at the national and local level will start paying attention to what they want. One thing on their wish list might be legislative help with down payments. Recent research indicated that Gen Z clients are not putting down the traditional 15-20% down payment like their parents did. Instead they are putting down 5% and then facing higher monthly payments.
A good example of this kind of legislative aid is the HELPER Act, which is a bill to create a program so that community heroes, such as the ones served by Homes for Heroes, can buy a house without a down payment.
In response to the needs of Generation Z, it’s not hard to imagine similar legislation, not unlike FHA loans, for the next generation of first-time home buyers.
They Tend to Prefer Experiences Over Possessions
MTV says Generation Z is less interested in owning material possessions than Millennial homebuyers. If that’s true, then real estate brokers have their jobs cut out for them. It makes sense in terms of generational trends; most generations in the early years do value adventure over settling down. In other words, it’s a phase that most young people go through. Time will tell if Generation Zers are committed to experience over ownership or not.
Until we know for sure, you may want a marketing strategy that emphasizes the “experience” of owning a home over the acquiring of property with your Generation Z clients. You could also talk about the amenities that are “in the neighborhood” such as climbing gyms, hiking opportunities, farmer’s markets and the like.
Real Estate 101
It’s important to remember, amidst this flurry of Gen Z’s characteristics, that they are also first time home buyers. As such, they are going to need a lot of education about the real estate process. A funny article on that subject is “Of Course I Know What Escrow is”.
But seriously, this is where you as a real estate agent can really shine. Educating and explaining the ins and outs of the home buying process is a great way to introduce yourself to the new generation of younger buyers. It can build long-term connections with these young people.
Join Homes for Heroes – Be the Agent Gen Z Heroes Want
Homes for Heroes can help you specialize in your market and grow your real estate business by helping your local heroes buy, sell or refinance a home. You can offer them something special, something beyond the transaction, by saving them significant money as a way to thank them for their service.
Complete your registration and schedule a time to learn more about the benefits of being a Homes for Heroes local market specialist, and become the agent or lender your community heroes want to work with for their home and mortgage needs.
Note About Author: Bob Filipczak is the co-author of Generations At Work (first and second edition). He speaks on generational marketing and communications to organizations. His previous clients include the University of California Davis, the Association of Patent Lawyer Firms and the Space Telescope Science Institute.