In fewer than four years, the great population bulge that has been dubbed Generation Y will begin entering the new-home market, and as they move in, they are likely to change the way things are done in the home building business. As a group, they are considered bright, bold, brash, savvy, wired—and different.

There are 80 million of them—nearly twice the size of Generation X. The largest group of Gen-Yers will be shopping for their first homes in 2012, fueling what's expected to be the most active first-time home buyer market in history.

As a group, this generation has tastes and attitudes that differ from those of previous generations in just about every way imaginable, including housing preference, location requirements, and the process by which they will shop for a home.

“Their preferences are so different that it looks like we're facing a whole new game,” says Shyam Kannan, vice president and director of research and development at Robert Charles Lesser & Co., a national firm that consults on real estate trends. “They have a different value system for what they're willing to pay for. This is a huge shift.”

Home builders who understand and address the needs and wants of this emerging demographic will be poised to thrive, according to Kannan. Others will be left behind. “People who can get off the fence now will be well-positioned to cater to them,” he says. “[There are some builders who] say, ‘I've been building homes for 30 years; I know what I'm doing.' Well, that's not going to be the case anymore.”

So, get ready or get schooled.

LESSON NO. 1: KNOW WHO YOU'RE DEALING WITH Gen-Yers go by a lot of names: the Millenials, the iGeneration, the Echo Boomers. They're too young at this stage in the game to have branded themselves, but consumer analysts for years have been preparing for the coming of age of babies born between 1979 and 1996.

And make no mistake, there's good reason for all this nervous—and giddy—anticipation: At 80 million strong, Gen-Y represents a historic population spurt even larger than that of their parents. If the Boomers tweaked and remodeled the U.S. economy over the past half-century, Gen-Y is swinging a sledgehammer and ready to give the nation an Extreme Makeover.

“I see very positive things coming from this generation,” says John Zogby, president of Zogby International and author of “The Way We'll Be,” a report on the transformation of the American Dream. “They've got the experience levels and a very outward focus. They're going to make real changes in society.”

Gen-Yers grew up during a strong economic upswing. They have attained a higher level of education and are more assertive than the tides of young people that came before them. Technology has trained them to be more connected to both their peers and the world at large. They're also more racially diverse than any previous generation.