Target Practice: Aim for Gen Y

The disconnect between the couple looking to buy a car and the car sales person is painfully obvious.  While humorous, it demonstrates the point that understanding your audience is paramount to closing a deal. 

For real estate agents today, understanding Generation Y (a.k.a. Gen Y) is the key.

Why? Gen Y is the next big wave of homebuyers.

As a group Generation Y, is larger than the Baby Boomers – there are 80 million of them compared to about 60 million Baby Boomers. Plus, they have more earning power than the generation before it, about $200 billion compared to $125 billion of Generation X.

According to Terrye Underwood, senior principal at real estate research firm RCLCO in Los Angeles, “Generation Y stands to create the biggest wave of first-time home buyers ever in 2012. With this generation, we might naturally grow ourselves out of the current housing slump.”

According to Terrye, Generation Y is “a label attributed to people born during the 1980s and early 1990s. Members of Generation Y are often referred to as “echo boomers” because they are the children of parents born during the baby boom(“baby boomers”).  Children born during this time period have had constant access to technology (computers, cell phones) in their youth."

There is a generational gap between real estate agents and Gen Y. This gap has to be breached for real estate agents and brokers to connect with this new group of homebuyers. Referring to the The 2009 National Association of REALTORS® Member Profile, the median age of a REALTOR® is 52 years old. For sales agents, the median age is 52, and the median age of brokers is 56.

Gen Y age range is from 18-30 years old.  Thus the generational gap between the average age of a REALTOR® to the average age of a Gen Y is between 20-30 years different.  This is significant.

Certainly more homebuyers are going online to search for homes and find real estate agents.  The Internet is becoming more and more important for real estate agents and brokers to harness. 

As REALTORS® begin to use the Internet to market their properties, specifically Social Media, it is important to note that Gen Y dominates the Internet.  Omniture recently released a report titled “Blogs, UGC and Social Networks: Creating and Measuring Great Social Media.”  Onmiture is a web-analytics company, that provides data for expert analysts to interpret.  In this report  Emily Riley, of Jupiter Research, Jeremiah Owyang of Forrester, and Brian Watkins, Social Media Manager at Omniture, discuss best practices for successful social media campaigns. This report detailed the ages of social media users, (see graph below).

Omniture concluded that, “The highest concentration of young users is found on social networking sites. The faster you move away from social networks, the more the consumer landscape becomes equivalent among age groups. Reading blogs and articles on newspaper sites has evolved into relatively normal behavior. For instance, the number of people who read comments on a mainstream site is close to the number of consumers who read newspapers in general.”

It is no secret that to reach Gen Y, utilizing the Internet is crucial.  Social Media is the key medium. 

But what is the message, once you have Gen Y’s attention?

A growing concern is that real estate today targets baby boomers, not the up and coming generations. “Real estate as it exists today was built for Baby Boomers,” Ferrara of Matthew Ferrara and Company, Boston, MA, said. “Gen Xs and Gen Ys are not getting married as young. They invest in what’s important to them and it’s not the same as Baby Boomers.”

There are a few characteristics unique to this budding group of homebuyers.

1.) Gen Y doesn’t want to be tied down

“Gen Ys don’t want to be tied down to a home while they’re still changing jobs, traveling and single. “They want to be where the action is. They get their sense of community from their 1,000 Facebook friends, not where their home is located. This generation is the total opposite of the Baby Boomers who got a job and worked there for 40 years until they retired,” Ferrara said in an article called Gen X & Gen Y: Home buying’s a lifestyle decision, not an investment.

2.) Gen Y prefer walkable environments and convenience, according to an interesting blog post from John Tarducci, Gen Y's are very different from boomers.

• 77% of prospective Gen Y buyers plan to live in an urban core, although those living in the Northeast will still express a preference for inner suburb locations.
• One-third say they’ll pay more to walk to shops, work and entertainment.
• Two-thirds say that living in a pedestrian friendly, walkable community is important.
• More than half of Gen Y buyers would trade a bigger lot for proximity to shopping or work; even among families with children, one-third or more would a trade a larger lot for a walkable community.
• Nearly half of Gen Y buyers would choose a “less than ideal” home if they could walk to work.
• Even in the suburbs, most Gen Y buyers prefer features common to urban areas, especially walkable environments.
• 70% don’t feel they must move to the suburbs once they have children.
• Only half say they’ll need a single-family home to raise a family
• Gen Y has an environmental consciousness
• More than half say that a “green” home and/or community will significantly impact their home buying decision.

3.) Gen Y has an environmental consciousness

More than half say that a “green” home and/or community will significantly impact their home buying decision. While some in real estate have embraced the concept of green homes and running a green real estate practice, many do not believe being green is a priority.

4.) Gen Y wants lots of choices

Gen Y members expect a wide selection of housing types and styles to choose from, though smartly designed spaces will trump size and affordability will remain key.

5.) Gen Y cares a lot about community

Gen Y buyers will also make housing choices based on the community, and they’ll choose a community that reflects their lifestyle, says Tarducci, in an insightful blog post.

When asked to name the most desirable community features, Gen Y buyers listed the following as their top hometown amenities: Library, Restaurant or café, Main street village, Recycling center and Fitness center

What are your experiences working with Gen Y clients?  Add a comment below and share an experience or tip!