With $2.5 Trillion in spending power and now the largest living generation in the United States, millennials are changing the way commercial property developers should think about attracting future real estate consumers and building experiences that will help them stand out from the crowd.
It’s no surprise that millennials and younger generations are being priced out of many traditional forms of land or home ownership. Rising interest rates have negatively impacted affordability for many buyers in the United States, as well as factors such as low nationwide real estate inventory. Take farmland for example, as AgAmerica recently reported that over 40% of U.S. farmland is owned by people over the age of 65. With so many factors working against these next generations, it’s important for developers and those who facilitate community development to consider how to make land ownership both attainable and attractive to a new generation of consumers.
In a study from Expedia, it was found that there is a fast-growing desire within millennials and Generation Z for unique experiences, travel, tourism, and entertainment, with 74% of all respondents placing a higher value on travel and experiences over products or things. As communities plan for the spending power of these future real estate consumers and the potential for increased travel and tourism, land agents can also find ways to make communities better prepared for the service expectations of these generations.
As a transitional land agent, I spend quite a bit of my time dealing with local government officials, community panels, planning sessions, and talking to developers about the development they see ahead for their community. When land agents look at millennials and Generation Z as fast-growing markets and begin to think about forecasting not just the needs but also the interests of these generations, they are putting themselves in a better position to help developers and landowners understand how to make the best use of the land that they currently hold.
Here are a few things community planners and commercial developers should think about to prepare for the next generation of consumers!
Access to Modern Conveniences
Working with landowners, we can see where cellular towers may be needed. Working with local and city governments, we can make sure that roadways and tours find that one-of-a-kind pitch that attracts an audience looking for something different.
A survey from the National Association of REALTORS® showed that 41% of respondents listed being within an easy walk of community amenities as a very important factor in where they would purchase a home, meaning that access to amenities and conveniences should be top of mind for any community planner in 2023. A transitional land agent can be a great asset to a city planning for future expansion or development because of their extensive connections with landowners, investors, developers, builders, and other professionals!
Millennials and Generation Z both claim to be more interested in spending money on experiences and travel compared to older generations. According to a study from Expedia, 80% of respondents between the ages of 18 and 34 claimed that they would be willing to pay more money for an enhanced or upgraded experience. With so many of these individuals being willing to spend extra money for more extravagant experiences, it becomes increasingly important for community developers and planners to account for this generational shift in values.
This is where planning for the future matters. Will a regular hotel next to a standard Walmart be the attraction the younger generation is seeking? Or are they looking for a location with a story next to a zipline? Does your community have access to easy travel that will make it all worthwhile for visitors who will be spending their dollars in community stores, restaurants, hotels, and attractions? A transitional land agent is a great asset to any city planner hoping to bolster the experiences offered by their community.
Millennials and Generation Z are driving growth in many areas of business, one of the most significant being mass transit. Younger generations are buying fewer cars, filing for fewer driver’s licenses, and in many communities are showing far more interest in Uber, Lyft, or any other service to get them from place to place. According to a survey from the National Association of REALTORS®, roughly 90% of Gen Z and millennial respondents claimed that they would pay more for a home in a walkable community.
This means that as a land agent when I talk to people planning a subdivision, they are working to plan for access to easy services like restaurants, stores, and more. You can see this already being incorporated into real estate websites that discuss walkability scores, a way to calculate how easy it is to walk to services. In the past, seclusion and distance from other communities were seen as added value.
All of this is to say that different generations have different values and if we want to reach millennials, Generation Z, and other future real estate consumers, then we need to start thinking about how to promote products, services, and lifestyles that are in line with their values.
If you’ve got more questions, then get in contact with one of our local Land Professionals!