Generation Z’s buying power appears to be growing hotter by the minute
By Donna Shryer
Generation Z, sometimes called the iGeneration (iGen), Gen Tech, Gen Wii, Net Gen, Digital Natives and Plurals, is loosely defined as those born between the mid-1990s and the mid-2000s, with the end date not yet set in cement. Working within this fuzzy timeframe, Nielsen data estimates that Gen Z represents 26 percent of the U.S. population, suggesting that this is the most populous generational cohort of all time.
Distinguishing characteristics for this cohort are difficult to define, since the youngest are around 7 years old and the oldest are only in their early 20s. However, researchers, marketers and brands are mulling over early rising Gen Z traits.
“We already see that as a group they’re feeling more bullish about the future—with a stronger economy and healthier job market. For that reason, Generation Z is a cohort that REALTORS® should be looking at now,” says Lesley Bielby, chief strategy officer with Hill Holliday, a Boston-based advertising agency.
Analyzing the Buzz
Credit agency TransUnion reports that 99,320 18-to-23-year-old Gen Zers held a mortgage as of Dec. 31, 2017, with the average loan around $14,000.
At first glance, it’s an impressive stat that suggests a trend toward putting down roots. However, according to the Pew Research Center, the number of Generation Zers is estimated to be around 69 million. So 99,320 mortgagees represents at most 0.14 percent of Gen Z.
Although it’s too soon to tell if Gen Z will evolve into a niche-worthy focus, it’s definitely a cohort to watch.
Gen Z’s more positive outlook for a better future may ignite earlier adulting than the millennials experienced, Bielby says. Adulting, in layperson’s terms, means doing “grown-up” things, such as having a 9-to-5 job, paying a mortgage or rent, making a car payment, or opening a savings or retirement account. “It’s too soon to say, but earlier adulting may spur Generation Z to purchase homes sooner than the previous generation,” Bielby says.
Projected buying power
One intriguing Gen Z trait bubbling to the surface is their apparent yen to spend. A report produced by Barkley, an agency geared to generational marketing, estimates that Gen Z already represents up to $143 billion in buying power. This puts them on track to become the largest generation of consumers by 2020, according to the report.
Furthermore, Gen Z places a higher value on owning things—as opposed to 76 percent of millennials who say they would rather spend their hard-earned income on experiences or events. And for Generation Z, Barkely says, “things” are brands that convey a desired image, bring happiness and aren’t necessarily inexpensive.
These brands help create a Gen Zer’s personal brand, which appears to be important, Bielby says. “Your neighborhood, what type of home you buy, what you wear, who you hang out with, the car you drive, your job—it all plays into your personal brand. If REALTORS® create a strong brand image for their business as well as their market, Gen Z’s affinity for brands may positively impact sales,” Bielby says.
Generation of savers
But Generation Z spends mindfully. The Center for Generational Kinetics finds that 29 percent of this cohort believes personal debt should be reserved for select items and 52 percent of employed Gen Zers are already saving for retirement.
Gen Z’s drive to save is likely a response to witnessing the millennials’ anxieties about money after growing up in the Great Recession, which in turn may explain why Generation Z wants to be self-sufficient.
“There’s an opportunity for REALTORS® to connect with these folks by teaching them the long-term value of building equity versus renting,” says Josh Perlstein, CEO of Atlanta-based digital marketing agency Response Media. “I would suggest that REALTORS® build a library of simple, educational online videos that explain this value.”
If you’re not convinced yet that this generation is worth watching, consider this: a Zillow survey reports that 62 percent of Gen Zers between the ages of 18 and 22 see owning a home as a key component of the American Dream. What’s the tip? Embrace this fact and welcome Gen Zers into your professional world. 
Scouting report
Here are several additional traits that Generation Z appears to possess—along with tips as to how REALTORS® might use these attributes to build relationships with this rising generation.
91 percent of adult Gen Zers maintain near-constant engagement with social media on mobile devices, with their time mostly split between social media platforms Instagram, Snapchat and Facebook. (Meet Gen Z, research conducted by Origin, Hill Holliday’s in-house research arm)
Tip: Strengthen your presence on all three Gen Z-preferred social media platforms, says Josh Perlstein, CEO of Response Media. Make sure your digital presence looks great on a mobile device. “If Gen Z wants to look at your website, they won’t wait to find a large screen. They expect the information at their fingertips on their smartphone. Now.”
Nearly 75 percent of Gen Zers have traded “IRL” (in-real-life) communication for digital communication via texting and social networks. (The Digital Lives of Millennials and Gen Z, LivePerson)
Tip: Get ready to do business via text—not by email, not by phone and rarely in person, says Lesley Bielby, with ad agency Hill Holliday. “Once this generation starts buying homes, they’re going to do as much as possible by text, from negotiating to finalizing contracts. You may get a text saying, ‘My name is Lesley. I’m looking for property in Boston. Here’s my budget. What can you show me?’ And you’ll need to text back information within minutes.”
“Authenticity” is a serious buzzword for Generation Z, with 67 percent agreeing that “being true to their values and beliefs makes a person cool.” (The Irregular Report, Irregular Labs)
Tip: “From what we’ve seen, Gen Z values people talking about who they are and what they believe in,” Perlstein says. “So if a REALTOR® wants to relate to Gen Z, they have to be transparent. We’re already seeing this, with food companies talking about their political beliefs and clothing companies sharing their world views.” Social media offers an interesting opportunity to share those beliefs, Perlstein suggests.
60 percent of Generation Z is looking for ways to make this a better world—as compared to 39 percent of millennials. (Sparks & Honey, New York-based marketing agency)
Tip: If you’re one of many REALTORS® who support their market in creative and giving ways, from volunteering at the local food bank to promoting new businesses, blast this news on social media channels. “It’s a great message that Gen Z is likely to connect with,” Perlstein says.
