Blog

Archive:

Will Millennials or Gen-Z Influence the Real Estate Market Faster?

By now, surely everyone has heard of the growing impact of Millennials in the real estate market. As millennials continue to drive sales and redefine the market, it’s becoming increasingly important for real estate brokers in Las Vegas to understand the coming impact of Generation Z (Gen-Z).

Though Gen-Zers are currently only teenagers, Gen Z is about to make their first landmark age achievement – the first round of their 18th birthdays begins in 2017.  Why is this chronological achievement so important for real estate brokers?

Simply put – these future first-time homeowners will become potential clients in just a few short years.  So, the call from real estate professionals to educate themselves on both Millennials and Gen-Z is imminent.

Who Are Millennials?

Referred to as “Generation Y”, millennials are the children of Baby-Boomers and/or Gen-Xers. Most commonly the millennial generation has been noted to have a rapid desire for [digital] technology that also functions as a source/platform of their communications/media. As an on-going debate between researchers and marketers, regarding a firm birth year range, millennials are generally considered to have been born between the early 1980s and mid-2000s.

Yet, several researchers (marketers) argue that millennials actually span from the mid-1990s to late 2000s.

The most important fact, however, about millennials’ timeline comes from the events that occurred during their developmental years.  Notably: The Great Recession. This event not only spanned a considerable amount of time, its impact on millennials has forced them to grapple with historically high levels of unemployment and ever increasing student loan debt, which pushed the opportunity of home-ownership of the table.

Without question, the results of high unemployment levels and staggering student loan debt, have also raised many concerns on potential negative repercussions to millennials’ economic and social framework for the long-term investments – such as real estate.

Who Are Generation Z?

Not ready to purchase, but already diverging from millennials. With only the first group of Gen-Zers coming into their late teens, this generation is changing some of the framework that millennials have set. Thankfully, Gen- Z  has not grown up through a recession, a war on terror, housing bubble, or been strangled by the reality of student loan debt.  Instead, Gen-Z has been given a more agreeable set of market trends.

Consider the current pace of [low] interest rates or the ever improving employment opportunities offering higher wages.  These market trends are not only helping millennials move closer to home-ownership, but are also providing a comfortable framework for Gen-Z to return to a more traditional desire for home-ownership.

As Gen Z comes of age, with greater resources, the reality of home-ownership seemly rises above future [student] loan debt and the forgotten reality of low-wage employment entrapment’s. The key to connecting to this generation is going to reside in understanding how they will leverage their own widespread usage of the internet from youth to adulthood. Similar to millennials, Gen-Z is seen as having a love with technology, social media, and digital platforms for their social communications. This affinity not only drives their connections to each other but also further extends the desire to conduct business online or digitally.

What Are They Looking For?

The 6% Question – What are each of these generations looking to gain from home-ownership?

Millennials:

The Kitchen – More and more millennials confirm their loss of interest in previous generations’ floor plans. Formal dining rooms are being taken over by kitchen as the new family room.

Home Office – North of 10 million Americans work from home – further expanding on the importance of a home office or a room that can be converted.

Transportation – Millennials are increasingly looking for greater proximity to [public] transportation. Their goal is to offset transportation costs in major cities and/or urban regions.

Green and Energy Efficient – Millennials are constantly looking to protect the environment and have a home that is [energy] efficient.

Gen-Z:

Unfortunately, this generation has yet to define their market trend(s). Nevertheless, there are a few key topics to keep an eye on:

Green and Energy Efficient Homes

Home Office and Work-staging Infrastructure

Technology Integrations

Millennials Continue to Lead Gen-Z – For Now:

Regardless of the timeline that defines a generation – whether it changes or remains the same, real estate brokers need to understand how the timeline drives a generation’s behaviors.

Millennials are currently in the driver seat, however, Gen-Z is now getting the app for a future home. As millennials continue to redefine the market, real estate brokers in Las Vegas cannot ignore Gen-Z. Why? Just consider the swings in trends that millennials have caused and will continue to cause, Gen-Z will only expand on them.

Whether it be a landing pad for drones delivering their Amazon orders or the self-driving vehicle docking staging areas residing in their neighborhoods, Gen-Z will undoubtedly challenge all previous generations’ ideas on first-time homeownership.  Possibly the most welcome challenge is the immediate want of home-ownership.