Gen Z Prefers Real Estate Agents Over IBuyers
By Kurt Real Estate Nov 23, 2019
Nine out of 10 Generation Z adults, the youngest group to wade into the housing market, plan on using an agent to buy a home, according to a Homes.com survey. The finding flies in the face of assumptions that digitally native youngsters will look to buy homes with new tech-powered services or go it alone.
The survey, which polled a 1,000 adult Gen Zers,18 – 24 years old, offers some insight into how agents could reel in business from the demographic. “We hear a lot about iBuyers and some platforms that are working to take agents out of the transaction,” said Homes.com President David Mele during a presentation at the annual conference of the National Association of Real Estate Editors, hosted this year in Austin, Texas.
The oldest members of Gen Z born 1995 – 2012, are in their early 20s. In contrast to their millennial elders, Gen Z has “never known a world without digital connectivity,” Homes.com noted in a blog post. And the most senior Gen Z-ers are coming of age during an era of full employment rather than economic crisis. Numbering up to 75 million, they are larger and significantly more diverse than millennials, according to Mele. Forty-eight percent belong to racial or ethnic minorities, according to the Homes.com survey. So perhaps it should come as no surprise that a majority say they’d prefer to own a home in an ethnically or racially diverse community.
Mele called their overwhelming preference for using agents a “surprise,” given that buyers have “all info at their fingertips” these days. The survey also offered deeper insight into what young Generation Z adults are looking for from agents. Among the young people, 27 percent said the quality they expect most from an agent is the ability to understand “what I want.” Meanwhile, 18 percent of those surveyed said “knowledge of the local market” was of high importance, followed by experience at 15.2 percent and negotiating skills at 9.1 percent. Only 7.3 percent considered “cost” a top concern.
The survey also called into question a narrative by Silicon Valley: a supposed desire by young people to be “flexible and nomadic,” said Mele. “Most members of Gen Z don’t want to bounce around like ping pong balls.” Eighty-six percent of those surveyed want to buy a home before they turn 35. If history is any judge, many will be disappointed. The overall home ownership rate, including older, wealthier Americans as well as millennials and members of Generation Z, clocks in at approx. 64 percent.
But those surveyed don’t appear to be oblivious to these obstacles. Forty-two percent listed making enough money to afford to buy a home as their top barrier to home ownership; followed by saving for a downpayment (21%) and student debt (20%). Sixty-four percent expect to pony up 11 percent or more for a down payment, while a quarter anticipates saving for 20 percent. The average first-time buyer only puts down 6 to 7 percent, he said.
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