Just as you got a handle on what millennials want in a home—move-in ready spaces with high-end appliances and room to grow—Gen Z is coming of age.
Researchers define Generation Z as people born between 1996 and today, which means the first wave is just about to turn 21 and will soon be graduating college—and quite possibly start renting while they save to buy their first homes.
Renting “For Now”
The rentals Gen Z seeks will only be a stopgap on the way to home ownership. They want affordable properties that are well maintained, a landlord who takes care of issues quickly, and a rock-solid, one-year lease that will provide security as they save for the future. “It’s remarkable how early in life this generation wants to buy a nest,” says Gene Clark, president and chief legal officer of 5 Arch Funding. “Fulfill their first step in the journey and you truly can have a lifelong partner.”
The Rise of the Suburbs
While millennials want to remain in cities or in mixed-use communities on their outskirts, Gen Z will seek more traditional houses in suburban or rural areas. They’re likely to spend their post-college years establishing their careers in a city setting, but they want to settle down in the suburbs.
Amenities vs. Size
Millennial homebuyers tend to want it all. Gen Z, on the other hand, is willing to make trade-offs to find a home that fits their needs. This latest generation is almost split down the middle in terms of what’s more important: size or amenities. While some want a bedroom for every child, a playroom, and even a home theater, others are willing to accept a smaller space—that is, if it means granite countertops, hardwood floors, and high-end appliances. This generation was raised on HGTV, so they are likely to have definitive ideas of what they want in terms of design and décor. You’ll want to hone your home staging skills to give Gen Zers a space they can imagine as their own.
Gen Z: Pragmatic and Cost-Conscious
This generation is realistic about how much home they can afford. They expect to spend, on average, $274,323 for their first home—just slightly above today’s median home cost of $273,500. They might make sacrifices on size and amenities to afford a newly built home with a structural warranty. A home represents a sense of security, which is enhanced by a warranty.
Having grown up during the Great Recession, they believe in practicality and are willing to make sacrifices. Space is critical and providing living contiguous California kitchens definitely wins with this audience. Never underestimate the ability of appliances to drive conversion.
Location, Location, Location
There’s one factor that Gen Z refuses to compromise on: location. The community doesn’t have to be walkable, but it should have good schools, nearby parks, shopping centers, and other amenities within a reasonable driving distance.
Technology and Gen Z
Gen Z, sometimes called the “iGeneration,” are the first true “digital natives.” Gen Z’ers have never known a world without social media or smartphones, and they are likely to live somewhere that has at least some Internet-connected devices. They will want the same—and better—in their own homes.
Selling to the iGeneration
Just as technology will be part of the homes they buy, it will also be a huge part of the home-buying process. This generation learns by video, and it’s likely they will begin their home search the same way. Be prepared to adopt technology, such as virtual reality and augmented reality, to show homes in their best light. You can even save time with video chat and connect with Gen Z homebuyers early in the process.
Gen Z is accustomed to having information at their fingertips—perhaps even more so than millennials. They move fast, so you’ll need to move fast, too, in your response to their unique needs in order to win their trust and their business.
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Be ready when the next generation of homeowners are ready to buy!