Are younger homeowners changing the HOA landscape?
As new innovations continue to help HOAs thrive, we must take into consideration the impact that these innovations are made up of. One of which is our younger generation - the millennial and Gen Z era. Their ability to bring new ideas and advances in technology to their communities has contributed toward a large success of why HOAs are now changing and conforming to a new standard of living. Not only have they contributed towards the impact of bringing software applications into their communities, they have also helped HOAs profit and thrive amongst their other competitors.
What are some factors that have led younger generations to help contribute change to HOAs?
A large part of what has helped many HOAs thrive, is due to their ability to bring more advances in technology to their communities. The ability to monitor and keep track of all aspects of an HOA is due to technology: collecting dues, sending notices, notifications, community updates, and virtual security.
- Digital payment options - Particularly starting with the millennial generation, it has been discovered that using digital payments and technology is a contributing factor of their decision to buy a home. In fact, “82 percent of Americans using digital payments — defined to include browser-based or in-app online purchases or in-store checkout using a mobile phone and/or QR code.”
- Automation - Technology has allowed HOAs to incorporate new features such as automation functions. Some may include: automatic payments, automatic messaging, wait-list, auto-payments, customer support, auto-deposits, and software updates. As more HOAs continue to utilize this benefit, the more likely younger generations will continue to expect this feature as part of their buying decision.
2. New generations on the rise
- Gen Z Generation - The Gen Z generation is referred to as individuals between the ages of 18-25 and born after 1996. In fact, it is estimated to consist of over 72 million individuals with many of them leaving the nest and on to securing jobs in hopes of owning their own home one day. Due to the pandemic, some have even found benefit from the recent labor shortages and are willing to help fill those positions — as a result, their level of income will continue to rise and eventually help contribute toward our future homeowner economy.
- Millennials - The millennial generation, also known as generation Y, is referred to as individuals between the ages of 26-41 and born between 1981 and 1996. Millennials now make up 43% of home buyers – the most of any generation – an increase from 37% last year. Considered to be the new driving force of HOA communities, this generation of people also comes with a strong ability to seek value and convenience into their everyday lives. As a result, this has led many older HOA generations to adopt and embrace digital solutions. A large reason for this is due to the fact that many were born into the digital world of the early internet days. Although some may not be as high-tech as our younger Gen Z generation, a large percentage still consider having technology in their homes to be a necessity as part of the reason they decide to purchase. As this generation continues to grow they will soon fill the shoes of our boomer generation and help advance our HOA communities into a new technology driven society.
3. Rental market
Another contributing factor of the change in HOAs is due to the rental market. Due to inflation and the current housing market increase, many younger generations have steered to renting homes vs. buying. According to a survey conducted by March Bankrate, the “biggest roadblock is affordability” for many Gen Z and millennial generations. As a result, some HOA homeowners have found this as a profitable opportunity to provide more rental options for potential homeowners that are not quite ready to commit to such a large purchase.
Conformity plays a large role in the uprising of our millennial generation. Why so? One reason being that millennials are known to find value in being convenient, impactful and responsible. As we know, HOAs have a large set of standards and guidelines that all members must obey by, such as: lawn and decor restrictions, parking, the size of your pet and even rental restrictions. Homes are required to look and portray a specific appearance. For the millennial, they may take this approach as boring and not as impactful. In fact, they may desire a more modern approach, where showing uniqueness and modernization are considered to be more impactful in their ability to resell their homes. With that being said, it would come with no surprise to one day see millennials being the ones to change and overrule the old school standards into a more modernized way of living.
5. Social media
Another contributing factor to changes in HOAs is social media. Both millennials and Gen Z take a large part in the impact of why many HOAs are now utilizing social media as a new platform of communication and source of influence on new homeowners to join their communities. In the US, 58% of millennials said social media is an important information source when making shopping decisions. Half of Gen Zers agreed, while just 12% of baby boomers said their shopping is significantly influenced by social media.
All of these factors are playing a role in how the HOA landscape is changing. As a management company, manager, or board it is important to notice these changes and adapt to them to ensure you are offering your community the resources they want and need. One way that you can do this is through software like TownSq. We are constantly looking at ways to improve the connection between, managers, boards, and residents. We offer a suite of innovative tools, and are constantly making updates and advancements based on our users feedback.
Interested in learning how TownSq can take you to that next level? Schedule a demo with us and find out.