How to work with Gen X clients: A powerful (but overshadowed) force

This is the third installment in Inman’s series on the ways people from different generations approach the homebuying experience. Click here for part one on millennials, and here for part two on Gen Z. Also, check back in the coming days for additional stories on homebuyers from the baby boom generation as part of Agent Appreciation Month. And take advantage of our Agent Appreciation Sale, and subscribe to Inman Select for only $85. 

Warren Hill got just about everything he wanted out of a home.

Hill lives in the San Diego area with his wife and three kids, ages 14, 12 and 9. When the pandemic began, they hunkered down with extended family members, but by the end of last summer were looking for something bigger.

“Our house was a little too small for our family,” Hill recently told Inman. “And I said, ‘I think we should consider buying another house. One that we can actually fit in and we don’t feel like we’re crowding each other.’”

The family had a fairly specific list. They wanted enough space for each child to have a separate room. They wanted a pool. They wanted space for their vehicles. They wanted a yard.

In recent days, Inman has highlighted the experiences of millennial and Gen Z buyers. Two consumers in those cohorts spoke about spending roughly a year searching for a place, only to make a series of steep compromises on space, yards, location and price. For those younger buyers, real estate was a contact sport.

But Hill’s experience was different. After beginning his search late last summer, the family found a home that had languished on the market, put in an offer, and won. They closed in September, then sold their previous home months later.

“There were no compromises to be made,” Hill said of the house the family ended up in. “We got what we wanted.”

There’s another key difference as well: Hill was born in 1980, meaning he’s at the tail end of Generation X. He’s older and more experienced than the buyers highlighted in previous parts of this series, and when he went to get a home in 2021 it wasn’t his first rodeo.

TAKE INMAN’S GENERATION X QUIZ TO SEE IF YOU SPEAK YOUR CLIENTS’ LANGUAGE

Hill’s story, then, highlights how the experience of Gen X homebuyers diverges from those of younger consumers.

Generation X is not the biggest generation in the U.S. right now. They’re not the most talked about or fretted over. When Inman reached out to agents for this story, many easily offered up comparisons between millennials and baby boomers. Gen X, by comparison, was harder to pin down.

But despite all of that, much of Gen X looks a lot like Hill now. They have families, jobs and needs — and after years in the labor force, the resources to meet those needs. And for that reason, they’re a major force in the homebuying world. They’re the ones moving up, looking for more space, and buying houses at price points that younger consumers can only dream about. All of which is to say that while the baby boomers might represent the past and millennials and Gen Zers the future, Generation X very much dominates the present. And that means understanding them is a vital part of making sense of the housing market.

Table of Contents

Who is Generation X?

Demographers typically define Generation X as people born between the mid 1960s, often 1965 specifically, through about 1980. That means the oldest members of the cohort are around 57 today, and the youngest are in their early 40s.

In terms of size, there are about 65 million Gen Xers in the U.S., according to the Pew Research Center. That makes the generation smaller than both the older baby boomers, who number more than 71 million, and the millennials, a category that includes more than 72 million people. That smaller size has meant that members of Generation X have had less buying power as consumers over the years, and as a result the cohort is sometimes overshadowed by both their older and younger counterparts. Occasionally, Generation X has been described as a “forgotten generation.”

Despite the generation’s comparatively small size, it has had a major impact on just about everything that has shaped the world today. Larry Page and Sergey Brin, the co-founders of Google, are Gen Xers. Elon Musk is a Gen Xer. Kurt Cobain, Kobe Bryant and Tupac Shakur were all Gen Xers. Friends was about six Gen X friends hanging out in a big city and continues to influence hang out comedies to this day.

These days, Generation X is also a dominant force in the housing industry. According to a 2021 report from the National Association of Realtors, which is based on thousands of survey responses, Generation X now makes up 24 percent of all homebuyers and 25 percent of homesellers.

A plurality of Gen X households, or 37 percent, make between $85,000 and $150,000 per year, according to NAR. Another 17 percent make more than $200,000. A larger percentage of Generation X are high income earners than is the case for any other generation in the U.S. right now.

One other factor worth mentioning is Gen Xers’ relationship to the Great Recession. While much has been made of millennials stagnating wages and tough labor market, Realtor.com senior economist George Ratiu pointed out that Gen Xers were in many cases homeowners when the housing bubble popped. The result, Ratiu said, was that Gen Xers “took the brunt” of the collapse at the time.

“When the bust came, a lot of Gen Xers ended up losing their homes to foreclosure,” Ratiu continued. “It took quite a while for them to see their equity go from being underwater to being positive. And many of them took longer to trade up from an entry level home.”

Median Gen X household net worth has since recovered, and by 2016 had surpassed pre-recession highs. But the housing collapse of 2007 and 2008 remains a major chapter in the Gen X story.

In any case though, Gen Xers are now late in their careers and in the prime of their earning lives.

Key Generation X traits:

• Generation X is smaller than both the baby boomers and the millennials.
• Members of Generation X built much of what is still considered the modern world.
• Despite the smaller size, the cohort is a major force in the housing industry right now.

Where is Generation X going?

NAR’s report found that Generation X homebuyers are largely looking for homes where they already live; consumers aged 41 to 55, their new houses were an average of 10 miles from their previous residence.

Gen Xers short distance moves likely speak to their ties to jobs and schools.

The report also found that 49 percent of Gen Xers bought homes in the suburbs.

Several agents who spoke to Inman for this series confirmed that their Gen X clients do indeed prefer suburbs to other types of environments.

“They really stick to the suburbs,” Kyle Whissel, CEO of the San Diego-based Whissel Realty Group at eXp Realty, told Inman. “I think they’re looking for more community driven stuff. Being in a community with similar age kids.”

Data from Realtor.com confirms NAR’s findings, showing that 50 percent of Gen Xers looking to move were simply going to a different neighborhood. Another 36 percent were planning a move to a different town or city in their current state, while only 13 percent planned to leave their state.

Those numbers are comparable to what millennials reported, but diverge from baby boomers, only 41 percent of whom were planning a move to a nearby neighborhood. By contrast, 30 percent of baby boomers were planning to move to a different state.

Gen X migration:

• Gen Xers are generally moving between neighborhoods in their existing cities.
• They’re more connected to local job markets and school districts.
• They tend to prefer suburbs.

What is Generation X looking for in a house?

Whissel summed up Gen X homebuyers’ preferences in one word: “Traditional.”

“They do it in a more traditional way,” he said of the cohort. “They’re putting money into a 401K. They work their way up the ladder.”

In real estate, Whissel said that means Gen Xers have tended to begin with starter homes, and are now graduating up to bigger properties. It sounds straightforward enough, but he compared that approach to the ones favored by both millennials and Gen Zers — who Whissel said are often trying to “skip rungs on the ladder” by for example renting out parts of their home.

Beyond being traditional, research suggests many Gen Xers have a middle-of-the-road approach to real estate. For example, fall 2021 data that realtor.com shared with Inman showed that a plurality of Gen Xers, or 44 percent, were looking for a home were willing to spend $350,000 or less on a house. That’s compared to 59 percent of baby boomers and 41 percent of millennials who were looking in that price range.

As is often the case, Gen X is right in the middle of the pack.

The realtor.com data also showed that when it comes to amenities, a garage was the most important home feature for members of Generation X. By contrast, neither millennials nor Gen Zers ranked garages as their top amenity.

Hill, the homebuyer in the San Diego area, fits well into this trend.

“I said, ‘babe I’ll give you the whole house,’” he recalled, “‘but I want the garage so I can take my Jeep in there and tinker with it.’”

Other popular amenities among Generation X, according to the realtor.com data, were updated kitchens, large backyards and a quiet location — all features that hint at Generation X’s current family orientation.

Hill’s experience epitomizes Gen X in another way as well: The home he ultimately found spans about 2,200 square feet. That’s typical for Gen Xers, with NAR’s report showing that a plurality of recent Gen X homebuyers, or 26 percent, bought a house that was between 2,000 and 2,500 square feet. Another 21 percent bought homes that were between 1,500 and 2,000 square feet.

Beyond these data points, it’s hard to generalize about Gen Xer home preferences. Tiffany McQuaid, president of Florida-based brokerage McQuaid & Company, described Gen Xers as a kind of “border” generation that bridges the gap between millennials and baby boomers. And as a result, they tend to have a diverse array of things they want in a home. And among other things, “they’re much more open to renovation.”

“I find this particular age range to be very open minded in terms of real estate condition,” McQuaid told Inman. “‘Sweat equity’ for me are the two key words for the Gen X category. What I like about this category is you can show a plethora of properties because they’re way more open minded.”

McQuaid went on to say that many Gen X buyers in her area gravitate toward amenity-rich properties.

“They want pools and spas,” McQuaid said. “They want huge entertainment areas and larger yards. They want big, elaborate kitchens.”

Daryl Fairweather, chief economist for Redfin, noted that Gen Xers are also “sitting on a big pile of equity” and thinking about how to use it. They’re also thinking seriously about how to pay for big ticket items such as their children’s college education.

For Gen Xers with younger kids, local schools remain an important selling point. Fairweather also noted that the coronavirus pandemic has complicated this particular issue, with some parents now considering not just academics but safety protocols as well.

“Right now, what’s interesting about picking a school district is if it’s masks verses non-masks,” Fairwather noted. “I think that is a factor for Gen Xers considering a school.”

Gen X home preferences:

• Gen Xers tend to be more traditional in their tastes, according to some agents.
• Members of Generation X are sometimes more willing to put in sweat equity.
• Many Gen Xers still have kids at home.

How are Gen Xers paying for their homes?

Realtor.com’s data shows that a plurality of prospective Gen X homebuyers planned to put down between 11 percent and 20 percent. That’s relatively similar to millennials, though it’s worth noting that 16 percent of Gen Xers planned to pay for homes in cash. By contrast, only 12 percent of millennials planned to do the same.

McQuaid has seen firsthand the buying power of Gen Xers, saying that in her market the cohort represents “a big cash market in a lot of ways.”

“They’re coming in with a substantial amount of wealth built,” she said.

Jackie Soto, owner of brokerage EHomes in California’s Inland Empire region, has seen this as well, saying that if consumers are “in their 40s and purchased 10 years ago they have way more equity now.” And that gives them a unique amount of buying power that younger consumers may often lack.

However, Soto also noted that some Gen Xers also face financial obstacles that aren’t as big a factor for people in different stages of life.

“There’s a lot of divorce sales going on with people in their 40s,” she explained.

That influences both home type preferences — it can lead consumers to downsize, for instance — and also means families end up splitting their assets and have fewer resources with which to purchase property.

Here, again, Hill’s experience is illuminative: He said he recently came out of a difficult divorce and his family is blended. In order to make the family’s home purchase work they sold one car — Hill’s beloved Jeep no less — and rearranged the ownership situation on another. Everything worked out well for them in the end, but the episode highlights how Gen X finances can be more complicated than those of relatively unattached younger buyers.

Gen X finances:

• Gen Xers tend to rely on conventional down payments and mortgages, though the generation includes more cash buyers than younger cohorts.
• Members of Generation X potentially come to deals with a lot of equity in existing properties.
• Some Gen Xers are moving amid or following divorces.

How does Generation X think about real estate and real estate agents?

Anne Jones, co-owner of Windermere Abode in Tacoma, Washington, told Inman that despite Gen Xers’ older age relative to the youngest homebuyers, they’re often tech savvy and do research online. However, there’s a key difference between them and their younger counterparts.

“I think they understand that the internet is a resource for them but I don’t think they give it the same level of credibility as a friend’s recommendation,” she explained.

In other words, Gen Xers are using the same tools as consumers in other cohorts, but trust them differently. And in this way, the Gen Xers are arguably more like the baby boomers, who Jones said tend to be more focused on relationships in their real estate dealings, than millennials or Gen Zers, who might trust a Google review just as much as their friends’ advice.

NAR’s report ultimately reveals that 37 percent of surveyed Gen X homebuyers found their agents through the recommendation of a friend.

Jenny Wetzel, an agent at Jones’ brokerage, also told Inman Gen Xers tend to do more vetting when they’re looking for an agent to work with.

“They’re almost always interviewing multiple brokers,” she said. “Which I appreciate.”

Gen X is unique in other ways as well.

McQuaid noted that unlike some younger buyers, Gen X sometimes has a longer-term mindset when it comes to their real estate ambitions. She said many have plans spanning years or even a decade, and that “they’re assuming this is not going to be their last property.”

Hill falls squarely into that category. When asked if his new house might become his forever home, he quickly said no. Instead, Hill hopes to eventually move to a house that has fewer restrictions — his current place has a strict HOA — as well as space to park an RV and handicap access for the day when extended family moves in. Hill doesn’t imagine selling his current house, assuming he’ll instead rent it out. But like many of his fellow Gen Xers, he’s thinking about real estate strategically and on a long-term timeline.

“It’s no real rush,” Hill concluded, “but we do want to move into another house.”

Email Jim Dalrymple II