The real estate industry is constantly evolving and adapting to the changing needs and preferences of different generations of home buyers and renters. In recent years, two of the most influential and diverse generations have emerged as the main drivers of the real estate market: millennials and Gen Z.
Millennials, also known as Generation Y, are those born between 1981 and 1996, while Gen Z, also known as Generation Z or Zoomers, are those born between 1997 and 2012. Together, they make up more than half of the U.S. population and account for a significant share of the housing demand.
However, despite their similarities in size and impact, millennials and Gen Z have distinct characteristics, values, and behaviors that influence their real estate decisions. Understanding these differences and similarities is crucial for real estate professionals who want to effectively market to these generations and anticipate their future needs.
In this article, we will compare and contrast the real estate preferences and expectations of millennials and Gen Z, and explore the implications and opportunities for the real estate industry.
Millennials: The Largest Generation of Home Buyers
Millennials are currently the largest generation of home buyers in the U.S., representing 38% of all buyers in 2020, according to the National Association of Realtors (NAR). They are also the most educated, diverse, and tech-savvy generation, with high expectations for convenience, personalization, and social responsibility.
What Millennials Want in Real Estate
Some of the key factors that influence millennials’ real estate choices are:
- Affordability: Millennials are often burdened by student debt, stagnant wages, and rising living costs, which limit their ability to save for a down payment and qualify for a mortgage. As a result, they tend to look for affordable housing options, such as smaller homes, fixer-uppers, or shared living spaces. They also value flexibility and mobility, and may prefer renting over buying in some cases.
- Location: Millennials are drawn to urban areas that offer a variety of amenities, such as entertainment, dining, shopping, and public transportation. They also value walkability, bikeability, and access to nature and green spaces. However, some millennials are also moving to suburban or rural areas, especially during the COVID-19 pandemic, in search of more space, privacy, and affordability.
- Technology: Millennials are digital natives who grew up with the internet, smartphones, and social media. They expect their homes to be equipped with smart devices, such as thermostats, security systems, and voice assistants, that enhance their comfort, convenience, and security. They also rely on online platforms, such as websites, apps, and social media, to search for, buy, sell, or rent properties, and to communicate with real estate agents and other professionals.
- Sustainability: Millennials are environmentally conscious and socially aware, and they want their homes to reflect their values. They prefer energy-efficient, eco-friendly, and healthy homes, such as those with solar panels, LED lighting, low-flow fixtures, and non-toxic materials. They also support green initiatives, such as recycling, composting, and community gardening, and seek out properties that are certified by programs such as LEED, Energy Star, or GreenPoint Rated.
How to Market to Millennials
Some of the best practices for marketing to millennials are:
- Use online and mobile channels: Millennials are avid users of online and mobile media, and they expect real estate professionals to have a strong and engaging presence on these channels. Real estate agents should leverage websites, apps, social media, blogs, podcasts, videos, and virtual tours to showcase their properties, share valuable information, and build trust and rapport with millennials.
- Provide personalized and authentic content: Millennials are not interested in generic or salesy messages, but rather in personalized and authentic content that speaks to their needs, preferences, and values. Real estate agents should use data and analytics to segment and target their millennial audience, and create relevant and compelling content that showcases the benefits and features of their properties, as well as the lifestyle and culture of the neighborhoods they serve.
- Highlight affordability and flexibility: Millennials are often price-sensitive and value-conscious, and they appreciate real estate professionals who can help them find the best deals and options for their budget and lifestyle. Real estate agents should highlight the affordability and flexibility of their properties, such as low interest rates, favorable financing terms, rent-to-own options, or co-living opportunities. They should also educate millennials on the various programs and incentives available for first-time home buyers, such as FHA loans, VA loans, or down payment assistance grants.
- Emphasize technology and sustainability: Millennials are attracted to properties that are equipped with the latest technology and sustainability features, and they expect real estate professionals to be knowledgeable and proficient in these areas. Real estate agents should emphasize the technology and sustainability aspects of their properties, such as smart devices, energy efficiency, or green certifications, and demonstrate how they can improve the comfort, convenience, and value of the homes. They should also use technology and sustainability as a way to differentiate themselves from their competitors, and showcase their expertise and credibility in these fields.
Gen Z: The Next Generation of Home Buyers and Renters
Gen Z is the youngest and most diverse generation in the U.S., and they are just entering adulthood and the real estate market. According to a survey by Realtor.com, 40% of Gen Z plan to buy a home by the age of 25, while 30% plan to rent. They are also the most tech-savvy, socially conscious, and entrepreneurial generation, with high expectations for innovation, customization, and community.
What Gen Z Want in Real Estate
Some of the key factors that influence Gen Z’s real estate choices are:
- Practicality: Gen Z are pragmatic and realistic, and they value functionality and efficiency over luxury and aesthetics. They tend to look for practical and versatile housing options, such as modular homes, tiny homes, or accessory dwelling units (ADUs), that can adapt to their changing needs and preferences. They also value simplicity and minimalism, and prefer homes that are easy to maintain and declutter.
- Connectivity: Gen Z are hyper-connected and social, and they value connectivity and community. They prefer homes that are located in vibrant and diverse neighborhoods, where they can interact with people from different backgrounds, cultures, and interests. They also prefer homes that are integrated with the internet of things (IoT), such as smart locks, smart speakers, or smart appliances, that allow them to control and monitor their homes remotely and seamlessly.
- Creativity: Gen Z are creative and entrepreneurial, and they value creativity and expression. They prefer homes that are unique and personalized, where they can showcase their style and identity. They also prefer homes that have dedicated spaces for work, study, or hobbies, where they can pursue their passions and goals. They are also open to alternative and innovative housing options, such as co-working spaces, co-living spaces, or experiential spaces, that offer them opportunities to learn, grow, and collaborate.
- Responsibility: Gen Z are environmentally and socially responsible, and they value responsibility and impact. They prefer homes that are environmentally and socially friendly, such as those that use renewable energy, recycled materials, or biophilic design. They also support social causes, such as affordable housing, racial justice, or gender equality, and seek out properties that are aligned with their values and beliefs.
How to Market to Gen Z
Some of the best practices for marketing to Gen Z are:
- Use social and interactive channels: Gen Z are avid users of social and interactive media, and they expect real estate professionals to have a fun and engaging presence on these channels. Real estate agents should leverage social media platforms, such as Instagram, TikTok, or Snapchat, to showcase their properties, share entertaining and educational content, and interact with Gen Z. They should also use interactive media, such as games, quizzes, or polls, to capture Gen Z’s attention and feedback.
- Provide customized and diverse content: Gen Z are not interested in standardized or boring messages, but rather in customized and diverse content that speaks to their individuality and creativity. Real estate agents should use data and analytics to segment and target their Gen Z audience, and create relevant and appealing content that showcases the uniqueness and versatility of their properties, as well as the diversity and vibrancy of the neighborhoods they serve.
- Highlight practicality and connectivity: Gen Z are often budget-conscious and tech-oriented, and they appreciate real estate professionals who can help them find the most practical and connected housing options for their needs and lifestyle. Real estate agents should highlight the practicality and connectivity of their properties, such as modular design, smart features, or internet access, and demonstrate how they can enhance the functionality and efficiency of the homes. They should also educate Gen Z on the various ways to save money and time, such as by using online tools, apps, or services, or by sharing or renting their homes or spaces.
Emphasize creativity and responsibility: Gen Z are attracted to properties that are creative and responsible, and they expect real estate professionals to be innovative and impactful in these areas. Real estate agents should emphasize the creativity and responsibility aspects of their properties, such as personalization, work spaces, or social causes, and demonstrate how they can improve the expression and impact of the homes. They should also use creativity and responsibility as a way to differentiate themselves from their competitors, and showcase their vision and values in these
