Gen Z and The Real Estate Market

Melanie 

Ortiz Reyes

Content Specialist

The real estate market is ever-evolving, shaped by the preferences and behaviors of different generations of homebuyers. While much attention has been given to Millennials and Baby Boomers, it's time to turn the spotlight on the up-and-coming generation in the housing market: Generation Z. Born between the mid-1990s and early 2010s, Gen Z is coming of age and gradually entering the real estate arena. Gen Z accounted for 9% of first-time home purchase applications in 2022. This number is expected to play a more significant role in the market as they mature. 

Generation Z, better known as Gen Z or Zoomers, is a generation that's grown up with technology at their fingertips. They're the true digital natives, having witnessed the rise of the internet, smartphones, and social media. This tech-savvy generation is known for its independent thinking and a strong desire for financial stability. Zoomers have distinct preferences when it comes to homeownership. They often prioritize affordability, as they are more financially conscious than previous generations at a similar age. Gen Z homebuyers are driven by factors such as:
 

• job opportunities
• affordability
• proximity to family and friends

What Are They Looking For?
 

Gen Z's defining characteristics are their independent thinking and strong desire for financial stability. This generation has grown up in the shadow of significant economic events like the 2008 recession and witnessed the financial struggles faced by their Millennial predecessors. As a result, they are highly conscious of making informed financial decisions, and this includes the decision to buy a home.

For Gen Z, the timing of major life events is often different from previous generations. They tend to delay traditional life events such as marriage and parenthood, and this can impact when they enter the real estate market. The delay in these life events is often attributed to factors like pursuing higher education, paying off student loan debt, and establishing a solid financial foundation.

Gen Z tends to seek out smaller, more affordable homes and is willing to compromise on space and location to achieve homeownership. They prefer smaller cities, leaving larger metro areas like San Francisco and New York City at the bottom of their list. According to the National Association of Realtors, Gen Z also values proximity to work and family, indicating a desire for a stronger sense of community and family connections.

Gen Z is also open to the idea of smart homes and sustainable living. They appreciate energy-efficient features and eco-friendly design elements, making properties with these qualities more appealing. As the real estate market continues to evolve, sellers and real estate professionals must embrace technology and sustainability to cater to the preferences of this emerging generation of homebuyers.

The Impact of Technology 
 

Gen Z is the first generation to grow up entirely in the digital age. They are highly tech-savvy, and their homebuying decisions were expected to be influenced by online research. They rely heavily on online resources, including real estate websites and social media platforms, for property searches. High-quality photos, virtual tours, and accurate property information are essential for engaging Gen Z buyers. Realtors and real estate professionals need to adapt to these changing preferences and provide a seamless online experience.

Despite being tech-savvy, Gen Z still values the expertise of real estate professionals. They appreciate the guidance of realtors and are more likely to use them as a resource when buying a home. This willingness to collaborate with real estate agents demonstrates the importance of personal connections and expert advice in the homebuying process.
 

Generation Z is poised to become a formidable force in the real estate market, and they currently make up 4% of all homebuyers. Their unique preferences, driven by technology, affordability, and sustainability, are shaping the future of homeownership. As Gen Z continues to mature and enter the market, real estate professionals and sellers must adapt to their expectations. Understanding this generation's motivations and desires is the key to successfully engaging with and serving Gen Z homebuyers. The real estate market is ever-changing, and with the entry of Gen Z, it's evolving in exciting new ways that will define the future of the industry.

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