Things are looking up. The generation with a scar to show for it… The generation that suffered the most from the 2009 housing crash, the generation that’s making a comeback in real estate, yet, the generation no one is talking about. Can you guess which one it is?
That’s right, Generation X.
Related: 6 Real Estate Market Trends of 2017
Who are Gen Xers?
Generation X is a demographic segment consisting of people born in the early to mid-fifties until late seventies and early eighties. Gen Xers are the members of the generation that follow baby boomers, and precede millennials.
Generation X is usually neglected due to the fact that it is a smaller, and usually less influential generation when compared to baby boomers and millennials. Consequently, it’s important to shed some light on Gen Xers because in recent years, they’ve had quite the effect on real estate. Everyone’s recently been more focused on the millennial effect on real estate market that they’ve completely forgone Generation X.
It’s important to remember that Gen Xers suffered terribly during the 2009 housing crash, and many lost their homes. This is why until a few years ago, the majority of Gen Xers have stuck to renting homes. But if there’s one thing they’re proving, is that they no longer want to solely rent property. With a stronger US economy, an ever-growing job market, and increasing home values, it sure looks like ‘the times they are a-changing’ for Gen Xers.
The opportunity in tracking Gen Xers and their effect on real estate
So where’s the opportunity in tracking Gen Xers and their effect on real estate? Simply put, Gen Xers make the most money. They bank an average of $106,600 per year, higher than both baby boomers ($93,800) and millennials ($82,000). Because they’re in their prime money-making years, they can afford to buy property, and to start and make families. Many are trading their smaller homes to larger, more luxurious ones. As the trend continues to be prominent among Gen Xers, it’s important to be able to identify other trends such as where they’re moving.
To further support the above data, The National Association of REALTORS’ Home Buyer and Generational Trends study for 2017 showed that Generation home-buyers grew from 26% to 28%. As this percentage increases over time, we expect the Gen X effect on real estate to become more substantial.
It’s still important to note that while they make the most money, Gen Xers are not the largest segment of home buyers in the US. It’s millenials who take the title for that one.
What are they looking for in a property?
Where and what are Gen Xers looking in a property? Are much of a surprise as it may be, Gen Xers are buying in urban areas, as opposed to millennials who are heading to the suburbs. Why? Again, since they have the most average income, they can afford property the most out of all generations, in urban areas specifically.
So if they’re your target market:
Gen Xers usually look for homes with several bedrooms, a home office, a living and a dining area, storage area, kitchen space, and even a yard. Gen Xers want to buy properties where they can settle in long term. So a home that suits most of their current and future needs is what they’re looking for. Additionally, Gen Xers are moving into areas with good schools districts, and generally better quality of life standards to accommodate themselves and their families. After all, Gen Xers are the largest generation who still have kids living at home.
To sum up…
Understanding these trends will allow you to better understand Gen X’s effect on real estate. Do not expect radical changes to the real estate game because of Gen X trends – their effect on real estate is not as substantial as that of millennials for instance. BUT, and that’s a huge but, any force can be a changing force in real estate. This is why it’s very important to study trends like where Gen Xers are buying, the top cities they’re moving into, their purchasing power, their preferences, and overall characteristics.