3 minute readNumbers may not lie, but they sure do play games as they determine whether to be helpful or not.
A corollary: Demographics [numbers again] may be destiny, but if they are, then how come so often these household patterns and the businesses that try to make money from them wind up in different places?
Consider data just released by the National Association of Realtors as part of its The compelling question – going back to the first two assertions in this story – is less about what the numbers say, and more about what they mean. And following on that, how that translates to risks and opportunities ahead for residential neighborhood developers, architects, engineers, planners, and builders. In other words, will the pivot to older, wealthier, less employment-centered, more flexible homebuyers come and go as a one-time phenomenon? Or does a higher-interest-rate, higher cost economic backdrop suggest instead an inflection to a longer run of mix-shift in customer segments toward the 55-plus part of the segmentation pie? Our guess is that a 55-plus tipping point – despite a still-enormous opportunity on the younger-adult household formation spectrum over the next decade – will remain in the top spot among generational cohorts for several years to come. They have the most to trade, the most leeway in their options, and the fewest quotidian demands on their time. Boomer homebuyers, 55+, and Active Adult are the segment that is — in terms of controlling the majority of wealth and equity in the U.S. – ‘able’ to buy,” says Deborah Blake, principal at Phoenix-based strategic advisory firm The Ipsum Group. “We need to design communities, lifestyle, and homes that compel them to move.” What this implies for architects, marketers, land planners, community developers, and homebuilder and investor partners is that a discretionary buyer – where desire and preference trump urgency and need – will remain an outsized opportunity area as the consequences of Covid, the money-manufacturing glut, and hyper-low interest rate excesses work themselves through a volatile and complex stretch ahead. Two parting ideas as thoughts in response to Deborah Blake’s statement that Baby Boom householders – since discretion’s on their side – need a “compelling” reason to move. One is this: Rather than design homes and communities that lay out and package a wholly configured future – in features, functionality, and programming – for a potential buyer, how about community and home design planning that offers buyers an array of scenarios. Borrowing from one of the godfathers of contemporary scenario planning, Peter Schwartz, as quoted here by Joseph Michelli: Scenarios are not predictions; in fact, they are an antidote to predictions. They don’t tell us what’s going to happen. They acknowledge many possible outcomes; we can’t say with any certainty what the future will bring. They serve as a backdrop against which users can structure their thinking and consider their options.” – Peter Schwartz, Wall Street Journal How might architecture, engineering, technology, and construction integrate “scenarios” into 55-plus buyers’ discretionary experience as homeshoppers, and in the livability they value? Secondly, time back. Places – homes and communities – that bend, and yield, and free up time may be one of the more compelling value propositions new neighborhoods can possibly offer a purely discretionary prospective buyer. Builders and their partners have made strides on securing time-back from the shopping and purchasing journey. Now’s the moment to make time an inseparable part of livability in the new home, new community benefits array.
