Who do you believe will determine the price negotiated on property sales closing in 2023?

  • Mostly the buyer will determine the price agreed to next year (69%, 102 Votes)
  • Mostly the seller will determine the price agreed to next year (31%, 45 Votes)

Total Voters: 147

Ready to feel old? Generation (Gen) Z, the age group born from 1997 to 2012, is approaching the age when their predecessors began to buy their first homes. But are they able to buy in today’s uniquely challenging market?

Gen Z makes up about 10% of today’s homebuyers, according to Lending Tree. The average homebuyer is 45, but first-time homebuyers are typically younger — between the ages of 30-39, according to Zillow.

The top U.S. metros where Zoomers are looking to buy are in inexpensive, midwestern or southern states.

In contrast, California metros do not even make the top ten for most popular metros for Gen Z homebuyers, but it’s really no surprise. California prices are astronomical — a major hindrance for first-time homebuyers lacking significant savings and still in their early careers.

Home prices in the Golden State have continually skyrocketed in the last two years. Historically low interest rates and low inventory pushed the rapid home price increases seen in 2020-2021.

In fact, California accounts for a good chunk of the least popular metros for Zoomers, including:

  • San Francisco, where Gen Z qualifies for only 3.6% of mortgages originated;
  • San Jose, where Gen Z qualifies for 4.5% of mortgages;
  • Los Angeles, where Gen Z qualifies for 6.6% of mortgages;
  • San Diego, where Gen Z qualifies for 7.4% of mortgages; and
  • Sacramento, where Gen Z qualifies for 8.0% of mortgages.

Related article:

Career Coach: first-time homebuyer considerations

First-time homebuyers are key to a healthy real estate market

The long-term health of the housing market relies heavily on first-time homebuyers. Without a continuous supply of new homeowners, turnover trends down. Thus, when the first-time homebuyer age trends older — as is occurring today — it’s bad news for turnover.

However, a shift is occurring in the housing market in 2022. While home prices still outpace many young incomes, today’s high prices have already lost momentum due to rising interest rates and an economic slowdown. In fact, the housing market is on the path toward recession, expected to arrive heading into 2023.

In recent years, real estate agents have preferred the surety of a seller’s listing to buyer clients, who may or may not be successful (or result in a payday for the agent). Now, as the current state of the market pushes on with rising interest rates and price cuts, listings will sit, prices will start falling and buyers will become scarce.

Agents who want to remain successful in the upside-down market ahead need to hastily shift their focus from finding listings to searching for willing and able homebuyers. This starts with a marketing plan targeting first-time homebuyers.

Look for qualified first-time homebuyers in apartment complexes and single family residential (SFR) rentals and distribute FARM letters aimed at finding these qualified buyers.

Further, online marketing is a fast-paced tool to:

  • pull in new clients;
  • market listings; and
  • keep up with past clients.

New clients being the key here. There are many ways to go about gaining new clients — like working on your own real estate agent site. Develop yours and continue cultivating leads, while also keeping in touch with past clients. What techniques do you use to successfully gain new clients?

To get started, check out firsttuesday’s free-to-download library of marketing content specifically aimed at bringing in first-time homebuyers, including:

For more, view the full library of FARM letters.