September 9, 2011
Today, those tech-savvy 20 and 30-somethings—part of the so-called “Generation Y” generally born between the late 1970s and late 90s—hold the fate of America’s housing market, say several recent industry studies, including one released in July by the University of Southern California’s Lusk Center for Real Estate.
“Population growth and demographic shifts, particularly the ongoing maturation of a diverse, well-educated Gen Y, will drive improvements in the real estate market over the next 10 years,” said a Lusk Center release about the study.
Stan Ross, Lusk Center chairman, said that while Generation Y number approximately 77.4 million—roughly the same as Baby Boomers—the younger set is more educated and diverse—and prudent with money.
The Lusk study suggests Generation Y will impact every level of residential product except senior housing.
Another study conducted in the summer of 2010 by ULI/Lachman Associates found 37% of Gen Y consumers are renters; 35% own homes; 26% live with their parents or siblings or in student housing; and 2% live in mobile homes.
“They have watched the stock market, financial markets and economy wipe out their parents’ retirement plans,” Ross said. As a result, they will tend to prefer “lower-risk investment strategies.”
Meanwhile, data collected recently by Wells Fargo financial services concluded over 51 million of the eldest Gen Yers are set to become first-time homeowners; as such, the lender publicly announced that it’s focused on reaching the younger crowd, which it considers “a lifeblood” for the housing industry.
That said, Wells Fargo also reportedly screened presentations in theaters across the country for over 26,000 real estate agents, simply to emphasize the importance of the coming tide of “Y” buyers and the group’s preferred purchasing ethos.
“Gen Y buyers expect a different attitude and value-added service. They are turned off by the slick, disingenuous salesperson of yesteryear,” said Courtney Smith, herself a Gen Yer and agent with Nourmand & Associates. “An agent had better deliver more than that.”
Actually, maintaining a good web presence is a must for any agent in today’s market, “but more important, in my opinion, is accessibility through technology. My iPhone is an extension of my hand. I answer e-mails and texts most waking hours of the day,” she said. “I expect it of my services providers, and so do my clients.”
According to Smith, the rule number one for Gen Y agents “is that the corporate structure won’t fly. I like meeting new clients at neighborhood spots like Proof or The Village Bakery instead of a conference room… Recycled matte card stock with a quirky logo says something about who I am that a boring letterpress seal on [a] linen [business card or stationary] cannot. I wear jeans to work, I drive a TDI [turbocharged direct injection vehicle]. I take my job seriously but make sure to laugh a lot.”
Such choices, she said, “affect my happiness quotient and keep me waking up excited to go to work.”
Michael Nourmand, the president of Nourmand & Associates and a Gen Yer as well, explained such tech-mindedness is not so much a matter of being caught up by all things electronic as it is being respectful of one’s time and resources.
“People need to get over the idea of giving too much information to consumers,” Nourmand said. “Consumers want [information]. You have to give what the consumer wants, or someone else will.”
And that changes the sales paradigm. At the point consumers, via online media, have near-direct access to most if not all of the properties available on the market, an agent’s job is no longer “finding, but helping [clients] through a highly complex and infrequent transaction,” he said.
Ironically, despite the market changes on their behalf, sometimes it’s the Gen Yers, more than even traditional buyers, who need to be persuaded to keep a re-tooled agent in the transactional mix. Gen Yers can be “too smart for their own good,” said Nourmand, who’s on occasion had to remind those of his own set that “usually, in every real estate deal, there’s a little twist that comes up” and it’s wise to have an agent on hand to solve it.