Kids these days. What do we really know about them? Well, these coming-of-age youths of Gen Y are more technologically evolved than preceding generations, which is evidenced by their behavior: co-dependent relationships with their mobile phones, addiction to social media and video games likely accessed from their tablet. And, apparently, they prefer renting an apartment over owning a home. That’s one of the factors cited by Reis for the historically low vacancy and high rents being seen in the U.S. right now.
In a recent Chicago Tribune article, Ryan Severino, senior economist at Reis, says This generation doesn’t hold home ownership on a pedestal the way prior generations did.
Instead, they flood city centers in search of jobs, fun and a place to live (not necessarily in that order), helping drive up national effective rents 1.3% over the first quarter while pushing down vacancies to 4.7%, its lowest level since 2001.
There are, of course, other factors contributing to the tightness of the market, including a lack of new construction. But even when new development begins and more properties become available, the lingering slump in the housing market will mean continued demand for apartments, especially from the youth.
And, does this come as a shock? Many of these young adults have grown up, and may only know, a collapsing housing market, are still navigating a depressed job market and facing stricter lending restrictions from banks. Plus, there are many benefits to renting that appeal to these cost-conscious consumers, including flexibility to move where they want and relocate for job opportunities and convenient access to amenities and maintenance support.
Knowing what makes these young renters tick will be critical in marketing to them and eventually signing them to leases. At Apartments.com, we spend a lot of time looking at search patterns and just geeking out on market data and trends, and here’s what we’re seeing:
- Mobile is huge. Traffic to our site from mobile devices (not including apps) has more than doubled since last year, which was more than double the year before. Because of the steeply inclined line mobile adoption data makes when graphed, staying ahead of this phenomenon is what I call scaling the mobile mountain. Actually, I don’t call it that. Sounds kind of stupid, really. Point is, it’ not a bunch of 40-and 50-year-olds driving the bulk of that mobile adoption. It’s first-time renters in their 20s, who live with their mobile devices and tablets always at their sides, so get after them.
In a talk I did way-back-when at NAA 2011 with our good friend Sarah Greenough (@SGreenough), we stressed the importance of having a mobile-optimized version of your property website, and I’m shocked to find so many today that still render the desktop site on a mobile device.
- Reviews make a difference. Talking about reviews to an audience of multifamily professionals is starting to feel like beating a dead horse. (“We know, we know! Enough, already!”) But consider this: In a recent Apartments.com study, 84% of respondents 18-24 used reviews as part of their decision-making process for finding a new home. That’s six percentage points shy of 90%, which in most cases I just round up to everyone! That’s a big number that deserves more – in fact, demands more – than begrudging acceptance.
- Social works. Even if you can’t always drive a straight line from a social campaign to a lease, having a social media presence isn’t enough. You need to keep it engaging, relevant and updated constantly.
But, I’m most intrigued by recent reports. Here Huffington Post’s Meagan Johnson and Larry Johnson demonstrate, rather nicely, how much Gen Y-ers are influenced by their friends, peers, and even their parents. Forget the latter for a second, and it’s clear much of this influencing happens through social media. Or, to paraphrase the Johnsons, The bottom line is that if you want Gen Yers to advise their friends to (lease) with you, you need to be a friend to them.
- Think green. A 2011 study showed Gen Y is more likely than older generations to support clean energy, and let environmental concerns influence their decision making. While installing solar panels on your properties may not be economically feasible (but a good idea if you can afford it), try appealing to this sensibility by highlighting your recycling programs or your community’s walkability (Gen Y prefers not to drive). Today’s generation is also more socially conscious (especially about giving back to the locally) than its Baby Boomer counterparts, so highlight local charity events and sponsor other community outreach programs.
On the bright side, a lot of this good marketing is just plain good. You get to expand your reach while building your community’s network and improving the world around you. Now, if we could just figure out how to gamify the leasing process, we’ll have the Gen Z sewn up as well.