Rise of the Gen Z Real Estate Investor
According to an article in the Insider, many Generation Z individuals are turning toward real estate investing as a career.
The Gen Z group represents people born between 1997 and 2012. Utilizing technology, and well aware of the potential upside that can follow a slow market, they are trading desk jobs to become real estate entrepreneurs.
GEN Z vs Millennials
The article compares millennials, who grew up during the real estate bust of 2008, to Gen Z. This younger group not only have the technical skills, but also witnessed the real estate pricing boom over the last decade.
It seems that the pandemic may have thrown a wrench into their post-graduate employment plans. Because of this, they are becoming self-starters and believe real estate is the best long-term investment.
The Gen Z investors witnessed first hand how a recession can bounce back. Many are taking advantage of falling prices in some locations to purchase homes as rentals.
According to the National Association of Realtors, millennials accounted for 43% of all real estate purchases in the US in 2021. Gen Z buyers accounted for 10% of purchases, but this number was up from only 6% in 2020.
Technology is a big driving force for many younger real estate entrepreneurs. With long-term rental sites like Zillow and Trulia, buyers can manage a property from thousands of miles away. Websites like VRBO and Air B&B allow them to parlay an investment into lucrative vacation rentals.
California has become aggressive in supporting accessory dwelling units (ADU’s) and many investors are either constructing granny flats to rent out, or living in the ADU and renting out the main house.
April 2023 CAR Sales Statistics
The demand for housing in California seems insatiable. Even while interest rates have made affordability an issue for some buyers, the median price for a home in California rose 3% in April 2023, compared to March. The statewide median price was at $815,340.
This is the first time that the statewide median price rose above the $800,000 level in the last 6 months. The California Association of Realtors article also describes how the market is becoming more competitive.
“We’re seeing time on the market before selling down to 20 days in April from 33 days in January and the share of homes sold above asking price double from one in five at the beginning of the year to more than two in five in April,” said C.A.R. President Jennifer Branchini, a Bay Area REALTOR®. “This increase in market competition continued to provide support to the statewide median home price in April, which climbed above $800,000 for the first time in six months.”
Contact me today for more information about the Lake Tahoe and Truckee real estate markets. We expect to see home prices hold steady, while additional inventory will be coming onto the market throughout the summer.