When it comes to housing in 2015, all eyes are on Generation Y — otherwise known as millennials. If you’re ignoring Gen X, however, you may be missing a vital opportunity for your business.
Baby boomer agents have struggled with how to understand the Gen X consumer. Significant differences in the Gen X “do-it-yourself” approach and the baby boomer agent’s need to be in control have caused many boomer agents to focus elsewhere. If you have chosen to ignore Gen X in your business, here are four important reasons why you may want to rethink your decision.
1. AARP — you’ve got to be kidding!
About three to six months before your 50th birthday, you will receive an unwelcome surprise in the mail: your AARP card (The American Association of Retired Persons). This year, the first wave of Gen X members, those born between 1965 and 1980, will receive those cards.
As Gen X hits their fifties, many will struggle with how to fund their retirement. You can assist them with this dilemma by showing them how to use an investment property to achieve this goal.
To illustrate this point, if a Gen Xer purchases an investment property at age 50 with a 15-year break-even mortgage, at age 65 the cash flow from that asset can fund a big chunk of their retirement. They can also use this to create a college fund.
2. Prime time for second homes
The prime time for second-home purchases takes place between the ages of 50 and 60. Although baby boomers still dominate the bulk of this market, many successful Gen X homeowners will begin looking for that ideal vacation property that can double as a retirement dream home later.
3. Caught in the sandwich
As Gen X turns 50, they are much more likely to be caught in the “sandwich,” supporting elderly parents while also continuing to support their children — oftentimes adults who have moved back home. To better accommodate the needs of their multigenerational household, the family caught in the sandwich is often forced to sell.
According the NAR 2014 Profile of Buyers and Sellers, “Thirteen percent of buyers purchased a multigenerational home due to the cost savings, children over the age of 18 moving back into the house, and health and caretaking of aging parents.”
4. Small in numbers, mighty in purchasing activity
According the U.S. Chamber of Commerce Foundation, baby boomers, millennials and Gen Z (age approximately 12 to 15 and younger) each comprises roughly 24 percent of the population. Gen X composes only about 12 percent of the population, while the Greatest Generation has about 16 percent of the population.
According to the NAR 2014 Profile of Buyers and Sellers, buyers between the ages of 25 to 34 still represent the greatest percentage (28 percent) of individuals purchasing homes — Gen Y currently is the largest generation.
What’s fascinating, however, is that though boomers and Gen Y each outnumber Gen X by a ratio of approximately 2-to-1, Gen X represents 20 percent of all buyer sales. In other words, though each of the other generations has twice as many members as Gen X, Gen X is purchasing at a much higher rate per capita than any other age group.
Gen X — the sweet spot for first-time buyers
The high rate of purchasing among Gen X can partially be attributed to their strong desire to become a homeowner. A survey conducted by Freddie Mac in December 2014 asked consumers, “In the next three years, do you expect to continue renting or purchase home.”
According to that survey, 58 percent said that they expected to purchase. Only 47 percent of the group ages 25-34 intended to purchase, and 31 percent or less in each of the remaining age groups (18 to 24, 45 to 54, 55 to 64, and 65 and older) indicated they expect to purchase.
Empty nest syndrome
For those Gen Xers who had children early, the last of their children might be graduating from high school. To help pay for college (and to keep their kids from moving back home), many parents are opting to move into something smaller once their last child graduates from high school.
Also, “helicopter parents” (those who hover over their children even when they go off to college) are sometimes moving to the town where their child is attending college.
How to target market Gen X
The easiest way to target market Gen X is to use REI Source. This service provides title companies with a broad range of demographic data right down to the types of magazines people read. Title companies can sell this data to you at their cost, which is usually less than 10 cents per name. Target by age, income level, location, career or any of a host of other factors.
If you’re not paying attention to Gen X, now is a great time to take a second look. The probability that Gen X will be buying or selling real estate in the next three years is higher on a per capita basis than for any other group — take advantage of it.
Bernice Ross, CEO of RealEstateCoach.com, is a national speaker, author and trainer with over 1,000 published articles and two best-selling real estate books. Learn about her training programs atwww.RealEstateCoach.com/
