OK, Boomer. Gen Z and Boomers Set to Battle Over Real Estate
The oldest members of Gen-Z are 23 years old and the Millennials are in their late thirties and both groups are tired of the Baby Boomers. From jobs and the economy to climate change and the very role of capitalism, these groups seem increasingly at odds. This has led to the rise of the expression “OK, Boomer” as a dismissive insult by younger people to mock the Boomers.
Wait until the generations really start clashing in real estate.
Drastically different priorities, expectations of the future, approaches to shopping, use of social media and the internet in general are going to make it more challenging for realtors to bring together Boomer sellers and younger buyers. Add in growing mistrust between the groups and you can see that finding common ground in real estate transactions is going to get harder to do.
A lot of realtors are not ready for this. Boomers are delaying selling and downsizing and Millennials are opting for smaller homes. This means that buyer’s agents will have to adjust to satisfy Millennials changing preferences and listing agents will find it more challenging to market Boomers’ houses when they do decide to sell.
Even talented realtors who have invested in technology and whose firms have strong systems and carefully managed operations will still struggle to find common ground between the generations. Many realtors have an attitude that people don’t really change that much from one generation to another. Boomers wanted nice suburban houses in good school districts and so did Gen-X, mostly.
More Baby Boomers are choosing not to follow traditional patterns and sell their family home and downsize at retirement age. Boomers are living and working significantly longer than their parents. About 20% of Americans 65 and older are looking for jobs or currently employed. Even retiring Boomers are staying in their homes much longer than expected.
On the other side, increased mobility and changing preferences by Gen-Z and Millennials means that homes won’t stay in the family as often as the Boomers pass away. Many of these people don’t want homes as large as their parents even when they can afford them.
The Great Recession a decade ago hit real estate hard. So even today, with home values rising, many Boomers are not seeing their homes worth what they once expected them to be worth. Add in less savings for retirement and you get more Boomers choosing to stay put.
However, we see a different trend in commercial real estate. Boomers are exiting commercial real estate faster than most experts expected. Many Boomers report their kids don’t want to manage commercial properties and would rather have the cash. Just the group of high net worth Americans control $1.3 trillion in commercial real estate, so this matters a lot.
What Baby Boomers do with their property matters a lot. About 28% of the country are Baby Boomers and that group controls 80% of personal financial assets. The oldest Boomers celebrated their 65th birthday in 2011 and 10,000 more will do so every day until 2030.
This means that real estate professionals need to focus on building their emotional intelligence. This means working to understand the different ways they need to work with Boomers and with younger buyers. Investing in better understanding people is going to be an increasingly critical skill.