What Does Gen Y Want in a Home?
Who are the Gen Yers and why are they important? Gen Yers (also called Echo Boomers or the Millennium Generation) are individuals born sometime between the years of 1979 and 1994. They are representatives of what is called a baby boomlet, and are nearly 80 million strong, compared to 75 million Baby Boomers. In contrast, Gen X, which received a lot of attention a few years ago, only had 17 million members.
Because of their numbers, the Gen Yers represent the first major demographic trend to rival the impact of their parents the Baby Boomers. As a result, they will have a huge effect on the development of a host of products and services, including housing. By 2015, Gen Yers are expected to represent in excess of 26% of the U.S. population, wielding $1.6 trillion in earning power. They will also be 30% of all homeowners. With these kinds of numbers, Gen Y tastes and attitudes will not only have a big impact on the types of products and services that are offered, they will also greatly affect how they are marketed.
Not Their Parents’ Generation
The Gen Ys are different from their Baby Boomer parents in a number of important ways. Along with the Gen Xers, they have grown up with computers, giving them expertise and an ease with technology that far exceeds that of their parents. Furthermore, according to an article that appeared in Business Week, they are a more racially diverse group (one in three is not Caucasian), and one in four grew up in a home with just one parent. In addition, three out of four Gen Yers come from homes with working moms.
Regardless of whether they grew up in a single-parent home or one with two incomes, studies show this generation is accustomed to having financial responsibility at an early age. For example, some received their first credit card while still in high school, while others borrowed money in order to attend college. Furthermore, since many grew up in homes where they observed adults balancing family and career, most of the Gen Yers expect to do the same.
First-Time Homebuyers
How does all of this affect home buying? A recent Century 21 study polled Boomers and respondents from Gen X and Gen Y in an effort to better understand the first-time homebuyer experience. The average age for Gen Y homebuyers in this study was 26. This is three years younger than either Gen Xers or Baby Boomers who, on the average, bought their first homes at age 29. REALTOR® Christy Maupin with Roy Wheeler Realty Co. agrees with this finding. A Gen Yer herself, she has noticed that her Gen Y clients are noticeably young when they buy their first house, although they are also quite independent and technologically savvy in a way that is not matched by homebuyers in older generations.
Maupin made a special point of describing the independence of Gen Y women, many of whom, she says, choose to buy homes while they are still single. She pointed out that these women are accomplishing goals in accordance with their own timetables and not waiting for a marriage proposal before buying a house. Maupin went on to say, “I believe that, as a result of the hard work of the women in our mother’s and grandmother’s generations, Gen Y women tend to be much stronger emotionally and far more independent.”
Interestingly, the Century 21 study found that 72% of the Gen Y survey respondents were single women, compared to 56% of Gen Xers and 59% of Baby Boomers.
Why They Buy
What motivates the Gen Yers to buy homes, and at such a relatively young age? Erin Garcia, a Gen Yer and REALTOR® with Loring Woodriff Real Estate Associates, said her younger buyers seem particularly motivated by the investment aspects of owning real estate. She said many of them are now observing their parents entering retirement and are sophisticated enough to recognize their need to start early on their own planning. She said her Gen Y clients ask a lot of questions and are very insightful about the way they make their real estate decisions. The long-term investment implications of questions such as whether to buy a condo, a townhouse, or a single-family residence are a big part of their decision making.
Maggie Gunnels, another Gen Y REALTOR®, works in the business with both of her parents and is affiliated with the Jefferson Centre office of Real Estate III. Her specialty is younger buyers, and she agrees that they have an interest in the investment side of things. They want a nice place to live, she said, but they know the inventory through searching online and they are definitely looking for a deal. Gunnels went on to say that these buyers are excited to be looking for a home in today’s marketplace, where their dollars go further and where they are in a position to negotiate a good deal.
These observations are supported by the Century 21 study which found that Gen X and Gen Y were more likely to be motivated by the investment side of home buying than their Boomer counterparts, with appreciation potential often cited as a reason to jump into the market. Possibly for this reason they are more deliberate, taking longer to make a commitment. Boomers, on the other hand, were more likely to have bought their first home due to changes in their family situation, such as a marriage or the birth of their first child. They also made their decision in less time than it took the average Gen Yer.
Communicating with Gen Y
Traditionally, REALTORS® have made use of print media, including newspaper and magazine ads as well as mailers, to entice buyers to look at their listings or use their services. My Gen Y REALTORS® agreed that this was not always the best approach for their generation.
Maggie Gunnels estimates that only 1 in 20 Gen Yers read the paper or seek out other print media to get their real estate information. Patrick May, of ERA Bill May Realty Co., agreed. He said it is much more effective to use online resources such as Google ad words and social networking Web sites such as Facebook to reach Gen Y prospects.
Once a Gen Yer becomes a client or customer, the agents agree, the best way to keep in touch with them is via e-mail or text messaging. Not only are individuals in this generation more tech savvy, they are also used to getting the information they need quickly, in no more time than it takes to click a mouse. As a result, said Patrick May, they prefer working with an agent who can provide instant replies to their questions and concerns using their favorite technology.
He recounted a story about one of his fellow agents (not a Gen Yer) who called him and wanted to send him some information. May told him to just to text it, something the other agent had no idea how to do. Obviously he will need to learn if he wants to work with Gen Y clients. In contrast, May uses his phone to send and receive both text messages and e-mail. He also accesses Microsoft Office from his phone and even uses it to open lock boxes when showing property.
The other agents agree that although they still communicate a lot by phone, their clients prefer e-mail. Maggie Gunnels said that even if she leaves a phone message for one of her clients, they frequently respond via e-mail. For that reason it is critical for REALTORS® working with Gen Yers to have quick and easy online access so they can stay in close touch with their clients and provide the kind of service they take for granted.
Gen Y as Clients and Customers
What is it like to work with Gen Yers and how are they different from other buyers?
All of the agents agreed that when these clients are ready to buy a house, the first thing they do is go online and search the MLS to find homes in their price range. In most cases, when they arrive at the first meeting with their agent, they already have a list of the homes they want to see. If you are a seller take note. With buyers screening homes in this way, it is critical to have photos and descriptions in the MLS that entice them to take a closer look.
While they are obviously sophisticated in this respect, the Gen Yers are also first-time buyers who have a lot to learn about the real world of real estate buying. Christy Maupin says she enjoys working with this age group because although they are more knowledgeable in some respects, they are also eager to learn more, and are excited about owning their first house. She likes the fact that they take such an active interest in the home buying process. As a group she finds them open to new ideas and willing to consider a wide range of housing options. She related that one of the challenges of working with Gen Yers is educating them while also helping them separate out reality from the misinformation they may pick up online.
Erin Garcia echoed these sentiments when she said that the Gen Y buyers are curious and ask a lot of questions. She finds them to be more flexible than some of her other clients and interested in expressing their individuality through their housing choices.
What Gen Y Looks for In a Home
According to research recently cited in a variety of different sources, Gen Yers have a number of things they look for in a neighborhood. High on the list are a library, a main street village, a recycling center, and a fitness center. They are also reputed to be environmentally conscious, like living within walking distance of their jobs, and value diversity.
The agents I interviewed agreed with some of these. They said that singles especially like to live close to downtown. Several of them mentioned that their Gen Y buyers prefer minimal maintenance. This means they select homes or condos in good condition to begin with and prefer situations that don’t require a lot of yard work. Some mentioned the importance of finding a house or condo near a gym or workout facility.
All of this sounds like an urban lifestyle with a focus on convenience and accessibility, rather than a suburban lifestyle that features beautifully groomed lawns, or country living with a lot of privacy and Internet access by dial-up or satellite. Instead, the Gen Y lifestyle reflects the same values they display when house hunting. They want a fast-paced setting with easy access to the things they value most. Since these could change at a moment’s notice, builders, developers, and agents who want to do business with this group need to be flexible, responsive, and willing to communicate using the latest technology.
Celeste Smucker is a writer, editor and author of Sold on Me, Daily Inspiration for Real Estate Agents. She lives in Nelson County.
