What Does Gen Y Want?
One thing real estate pros should know about Generation Y is that its members prefer to swap texts to phone calls or even e-mails. Here's more info on the preferences of this up-and-coming group of consumers.
By Kristine Hansen | May 2011
Who is Generation Y? Their exact ages aren’t easy to pin down; the start of their birth years ranges from the late 1970s to the mid-1980s, depending on your source. Perhaps the best way to describe them is in historical and cultural terms: Most of them have little to no memory of the Cold War; seminal events such as the Challenger explosion and Chernobyl; or life before computers were commonplace in offices, schools, and homes.
This generation, also referred to as Millennials, now numbers around 80 million U.S. residents. And many of them are just a few years away purchasing their first home. How can you position yourself as the real estate professional they want to work with?
They Want It All — Now
Austin, Texas-based Laura Duggan — an early adopter of texting — learned the value of communication while selling Jason Dorsey, 32, and his wife a home two years ago. Phone messages Duggan initially left for Dorsey were not immediately returned, losing valuable time in a market where hot deals on smaller-size homes are scooped up within days. Dashing off a text message, however, yielded a lightning-quick reply from Dorsey.
“They want to communicate differently than a lot of my other clients. Gen Y wants texts, not even e-mail,” says Duggan, broker-owner of West Austin Properties, who has 30 years of experience selling homes.
“Gen Y is about instant gratification: If we can’t see it on our phone, it doesn’t really exist,” explains Dorsey, who is a frequent keynote speaker on Generation Y. He’s consulted for companies like Kraft, GE, Frito-Lay, and McDonald’s. While Dorsey and his peers can easily navigate the Internet in search of data, they often don’t know how to make sense of it. Still, “it’s critical that REALTORS® position themselves to educate us and not treat us like children,” says Dorsey. “If we don’t feel like we can ask questions and be a part of the process, we’re not going to be interested.”
The Right Information
Real estate pros can help put information about a listing into context, such as how property taxes differ from a nearby city or interpreting neighborhood crime statistics, he says.
“This is a generation that takes advantage of information. They come in [to a home showing] knowing everything about the property,” says Nashville-based consultant Amy Lynch, who works with companies that want to motivate Generation Y.
Dorsey boils the home search for this group of young buyers down to this: experiences. “In Austin, people want to live near the music, the Frisbee-golf parks, and walking distances to great restaurants that are happening.” If practitioners mention certain amenities that are within walking distance of a listing, such as an independent movie theater or a hiking and biking trail, that’s going to attract the attention of Gen Y buyers.
“A lot of these kids want to be able to go out at night,” says Marcia Anderson, who sells luxury homes in Phoenix and its suburbs through The Williams Real Estate Group. Mixed-use areas filled with restaurants, bars, shops, and housing are popular with members of this generation. “A lot of times it’s the zip code that dictates [interest].”
According to Lynch, many Millennials are willing to pay more for walkability. To get this, they might sacrifice a kitchen packed with luxury appliances or a grand master-bedroom suite. Yet some of their choices are circumstantial.
“They are vastly underemployed and in debt,” Lynch says. “It’s not a generation that’s making a lot of money.” Orlando, Fla.-based real-estate firm RCLCO released a study that showed 13 percent of Generation Y carpools to work, and 7 percent walk to their job. Eighty-eight percent of them want to live in urban areas.
All About Lifestyle
Some real estate pros are putting a new spin on urban neighborhoods — where members of Generation Y typically live, or want to live — by showing homes from a bicycle seat. Four years ago, Matt Kolb launched Pedal to Properties in Boulder, Colo. It all started when a client of Kolb’s — visiting from another city and checking out properties — went back to his hotel room at night. Desiring another viewing of the homes he’d viewed earlier in the day, he rented a bicycle from the hotel and returned to those neighborhoods on two wheels instead of four.
Today, the Boulder office has 30 agents and a fleet of 60 seven-speed cruiser bicycles. It’s also been franchised to Sonoma, Calif., and Northampton, Mass. This casual approach to home shopping wins Gen Y clients over, Kolb says. “It’s four to five hours where you are smiling and laughing. When clients are in the back of my car, it’s different,” he explains. Even the route taken from the office to the home is different — Kolb typically opts for the most scenic way on a bike instead of more direct roads, as he would use in a car.
Jenny Persha, a real estate pro in Madison, Wis., with Keller Williams Realty who specializes in green residential properties, has had luck marketing her home-buying services to Gen Y at street fairs and festivals — particularly if she’s got a listing a few blocks away. “Now, you’re actually having to find where the people are and how you can better serve them,” she says.
Because she’s 34 years old — fresh out of this age group — she has no trouble relating to her clients. “I feel like I’m in tune with them a little more. I can tell what questions they’re going to ask.” Sometimes she even receives leads while out with friends for a happy hour after work.
Different than previous generations, Generation Y buyers tend to view a home purchase as short-lived and not relevant beyond their current life stage. “We’re having kids later and we’re getting married later,” says Dorsey, who bought the smallest house on his block in case he and his wife want to relocate. “Long-term to us means five years. Gen Y is totally accustomed to the idea that they will be moving soon and again. We’re not tied down. That freedom is very important to us right now.”
What kinds of homes do Millennials want to move into? A low-maintenance house is a definite plus. “I don’t own a lawn mower,” says Dorsey, “and neither do any of my friends. This offends my father.” Instead, he and his friends rely upon a lawn service, affording them more time to relax, work late at the office, or spend time with friends. They either want to do the task quickly or be able to “outsource” it inexpensively.
Lynch agrees that Generation Y doesn’t want to spend weekends doing lawn work. “They want green spaces outside their house, to maybe put a grill, but not a large lot,” she says. A unit in a condominium with a clubhouse or a shared green space with other homes is a very attractive alternative.
Anderson noted that while swimming pools are an in-demand item for most Arizona consumers, younger buyers simply don’t want them. “They want to be able to take a vacation and not deal with that,” she says.
Whether it’s a compact ranch or a three-story urban walk-up, the layout should be conducive to entertaining and hosting — but not passing hors d’oeuvres or hosting charity benefits. Instead, this group seeks a gathering place to watch NCAA tournaments or play ping pong.
“They tend to want a ‘gathering space’ in the home, more so than fancy bedrooms and bathrooms,” Lynch says. “Y’s grew up doing things in groups all the time. Having a big house where you live with just you and your family does not appeal to them.”
Duggan was baffled when Dorsey brought friends along to view the homes he and his wife were considering buying. “Back in the day, you only brought people who would be impacted by the decision,” Duggan says. “Every generation has an idiosyncrasy. This one wants their peers’ validation that they are making a good decision.”
Due to this increased connection and desire for validation from peers, real estate pros should not hesitate to ask for the names of friends interested in buying a home. Using this approach, Duggan ended up taking on Dorsey’s friend as a client. Just don’t use the word “referral.” “This means something different to us than other generations,” Dorsey explains. “It reminds us of being called to detention during grade school. Instead ask, ‘Do you have any friends I can help?’ One happy Gen Y customer leads to 10 others.”
To further understand this age group, Anderson has employed her 26-year-old daughter to revamp her marketing. “Sometimes I’ll run something by her and she’ll say, ‘Oh mom, that’s so old-fashioned and boring and will never fly,’” says Anderson, who now has a blog, LinkedIn profile, Facebook page, and the ability to publish her listings on YouTube.com.
Persha affirms that’s the right approach. She finds social media like Twitter and Facebook to be the most noninvasive way to market properties. “I’d rather have it show up in their news feed than call them,” she explains.
This is exactly what Generation Y shoppers want. When they receive that message notification on their cell phones, it may be just a matter of time before they contact the real estate pro for a showing. But first, of course, they’ll investigate further, and perhaps even contact their buddies to run the idea by them.
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Thursday, May 26, 2011
What Does Gen Y Want?
Posted by Suzanne OBrien at 2:00 PM
Labels: 2011 Expert Advice, Business Plan, Detroit Area Home Sales, Michigan Realtors, Real Estate, Real Estate Coaching, Real estate news, Real Estate Trends, Realtor Training, Social Media Success
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