Meet Generation Z. Recent statistics show that these young consumers are getting into the housing market early despite their tender age. Born between 1995 and 2012, they are expected to outnumber millennials by 2020 -- just two short years away. Here are some interesting insights into their habits and expectations as consumers.
According to credit agency TransUnion there are 100,000 mortgages averaging $140,000 currently held by Generation Z home owners. This is a drastically smaller amount when compared to other generations, but it still shows a certain determination in this age group.
They are looking at different numbers than millennials who were faced with a less stable market and heavy student debt, not to mention growing up in a time when people were struggling to hold onto their homes. One more consideration, they could be getting help, not from their parents, but from their grandparents who have built up more equity compared to their Gen X kids who have more debt.
What They are Thinking
Wakefield Research surveyed 1,000 participants aged 13 - 17 in 2014 and discovered 97 per cent foresaw owning a home and 81 per cent would work with a real estate agent to do so. The oldest age in Gen Z now would be 23 which still seems young to buy a home. But it's not unheard of and although most people rent first, save and buy, there has always been the younger people who either get financial support from family, or are just eager beavers and move straight into their first home. In areas with higher rent the mortgage payments might just seem more logical to the pragmatic Gen Z'er.
Contrary to what the numbers are saying about home purchases, they are the first generation to embrace a more "temporary use" attitude with a trend towards "accessing" what they need versus owning everything from cars and clothing to music and accommodation. They pay only for what they need, and that need often does not include ownership. They can access all the music they want by paying a very small monthly fee with services like Spotify or share a car or call Uber for transportation, so why bother buying these things?
Gen Z Like to Get "Phygital"
Gen Z are the first generation to be considered "digital natives" meaning they have always known and used technology in their lives compared to "digital immigrants" who had to learn technology either as an adult or older child. This means they are very dependent on technology, BUT in a very different way. For example, Gen Z'ers actually like to get "phygital" with their preferred services offering them both a digital experience with something more physical whether it is picking up an order in an actual store, or getting to speak to a real person after making an online inquiry. 53 per cent prefer to meet in person over email or even text.
The recent purchase of Whole Foods by die hard online shopping company Amazon is a nod to the fact retail is not dead and could be revived by this new kind of shopper. Other future phygital experiences might include smart mirrors in clothing stores that can assist in finding the right fit or complementary attire, or appliances that can detect an issue and send out a service person to make repairs. And let's not forget the scanning gun to scan as you shop for quicker check out.
Gen Z'ers will expect technology to be used during the buying process whether it is the house hunt itself, or during the transaction. Therefore you have to be ready to deal with them using technology. They are all about AR, VR and anything iOS which explains their other identifier, the iGeneration.
Another thing about Gen Z is that despite the fact they love the tech, they avoid common social media, especially Facebook. They view this as a tool for older people and instead look to apps such as Snapchat and Instagram for their social media needs and as a way of communicating. So this is something to keep in mind for your marketing plans as they become more prominent in the market.
Capture Their Attention
Because Gen Z have admitted attention challenges (probably because of all that tech!) they are very capable of moving on to the next best thing without too much soul searching. In fact, the average attention span of the Gen Z'er is eight seconds! Eight!
What does this mean to you as a real estate agent? For one, Gen Z'ers will not stick with you if they feel you are being overly aggressive or pushy. They appreciate an authentic and honest approach they can trust to guide them on their buying process. But they also expect to reach you when they need you, so even a real estate agent's extended business hours might not be enough to keep them feeling their needs are being met.
You've gotta be quick if you are trying to reach them through ads. Even more important, they are the biggest group of ad blockers with 69 per cent using tactics to avoid ads. For ads they do respond to, humor is their preference -- they want to be entertained. Catchy music they appreciate, or an engaging story being told also help draw them in.
Last but not least, they are far more independent than those who came before them, with 61 per cent stating they would rather have their own business than be stuck with a boss. They grew up in the age of the start up and see opportunity everywhere.
The Gen Z Conscience
These young adults are the most eco and rights focused group yet. They have a stronger desire to make their mark yet are very serious about reducing their carbon footprint. The environment, human rights, sustainability and even vegan lifestyles all figure prominently in the Gen Z'ers life. Picking them up in a massive gas guzzling SUV, offering them a plastic bottle of water while driving to meet at a coffee house that does not sell fair trade coffee is not going to impress this group of home buyers.
All of this said, if there is one thing Gen Z has taught all of us, it is you can't paint any group of people with one brush. So the basics of offering personalized service to meet their specific needs will always be the best way to keep them as a client.