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Tuesday, 25 February 2020
Agent Resource Center
Agent Resource Center

Generation Z Is Poised to Disrupt the Real Estate Market

Written by Michael Zaransky Posted On Wednesday, 23 October 2019 05:25

Millennials are, like, so 2018. While that age group continues to be the apple of many marketers’ eyes, there is increasing interest in the next cohort coming down the pike: Generation Z.

Variously defined as those born between 1997 and 2015 (by the Pew Research Center), 1996 and 2015 (The Center for Generational Kinetics) and 1995 and 2012 (by Careerplanner.com), Gen-Z is gathering financial momentum as it comes of age. Its buying power was estimated to be $44 billion by Visioncritical.com, and it is expected to quadruple over the next two years.

Other estimates show just how powerful a force Gen-Z is likely to become. It is believed that by the end of 2019, this age group will account for 32 percent of the world’s population, to 31.5 percent for Millennials. By 2020, 40 percent of consumers across the globe will be from Generation Z, and within five to seven years they will comprise the largest group.

While some view Gen-Z as a mere extension of the Millennial generation, many others have discerned significant differences between the two -- differences that will disrupt many aspects of the economy, including multifamily real estate.

If Millennials wanted connectivity, Gen-Zers want even more, and they want it to be even faster; after all, they comprise the first fully digital generation. If Millennials wanted amenities, Gen-Zers want even nicer ones (though not necessarily the same ones). If Millennials wanted an eco-friendly space, Gen-Zers want one that is even friendlier.

Jason Dorsey, a researcher of these two generations, said the younger group is destined to reshape such things as communication, commerce and employment. Besides greater tech savvy, this generation is regarded as more optimistic and socially conscious than its predecessors. Also more individualistic (92 percent have already established a digital footprint), more entrepreneurial and more adept at multi-tasking but less likely to follow a traditional educational path and less apt to stay on task for any length of time (their attention spans are, on average, eight seconds).

There are parallels between the two cohorts, to be sure. Neither is likely to stay in a job for long. Ninety-one percent of Millennials and 83 percent of Gen-Zers said they plan to exit their first one before three years have elapsed. Nor is either likely to have much brand loyalty, Millennials because they had seen their parents (i.e., Baby Boomers) laid off from long-held positions, those in Generation Z because they have lived through the Great Recession of 2007-09. 

Both groups, however, are interested in personal branding and career advancement. Both are interested in being mentored. And a majority of both -- 84 percent of Millennials and 60 percent of Generation Zers -- would like to make a difference in the world.

Knowing all this, the challenge becomes how to catch their eye, how to get them in your building and how to keep them there. So start with the fact that they are “social natives” -- i.e., they’ve been using social media almost since the day they were born. At the same time, they are not as partial to Facebook and Instagram as their predecessors, understanding the problems that result from content permanence. (There’s also the none-too-small matter of that brief attention span.) They are instead partial to outlets like Vine and Snapchat, and more likely to use Twitter than Millennials.

The idea, then, is to engage them on those platforms. They yearn for a one-on-one appeal, for the direct approach. The other thing to keep in mind is that they are very much influenced by online reviews (as opposed to old-school advertising pitches), but will become suspicious if such reviews are uniformly positive; remember, they are leery of all things business. Companies should, as a result, never sweep negative feedback under the rug. Rather, they should deal with it in a forthright and timely fashion, as transparency carries a lot of weight with Generation Z.

The example offered in one blog post was that of Target, which in 2013 fell victim to a data breach. The company confronted the problem quickly and directly, the result being that two years later, its sales were up 40 percent.

That, then, is the starting point -- knowing how to appeal to this arising age group. But the bigger issue is making sure you have something concrete to offer Gen-Zers. Again, tech heads the list; these folks really, really crave cellphone reception and a high-speed internet connection. Kim Grisvard, vice president of EdR Collegiate Housing, joked at 2018 conference that 40 percent of Gen-Zers prefer a high-speed connection over a working bathroom. 

That’s only a small exaggeration. They would do want that conncetion more than such amenities as washers, dryers and pools, and to that end some builders have installed Distributed Antenna Systems (DAS), a network of small antennas within the infrastructure of larger buildings designed to improve cell signals.

 

Another gadget rising in popularity is the resident portal, which allows those in any given building to not only reach out to one another but also the property manager. That in turn allows for greater ease in dealing with maintenance problems, paying the rent, etc.

 

Gen-Zers are also partial to smart devices -- lighting, security, etc. -- especially those that might reduce their carbon footprint. The example offered on the Association of General Contractors website was that of lights or window treatments that automatically adjust to the availability of sunlight.

 

That same site noted that Generation Z, part of an economy in which 43 percent of the workforce telecommutes, also wants small spaces that can be adapted for work purposes, as well as private areas where meetings might be held and conference calls taken.

 

The long and short of it is, Generation Z is on the rise. And its needs can be expected to transform the multifamily space.

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