Builder’s parent company, Hanley Wood, recently hosted a symposium of scholars, economists, technology experts, and demographers to learn the latest thinking about the future of housing. The participants represented some of the best minds in their fields and were able to distill the facts at their disposal into a credible generalized national forecast for their disciplines, while still maintaining a good sense of local perspective. For their presentations, the speakers gathered an enormous amount of data, both current and projected, that bolstered their conclusions.
Some of the most interesting data came from Charles Hewlett, managing director of real estate advisory firm RCLCO. I’d like to share some of it with you (download a pdf of the data here ):
The population in the U.S. will continue to grow, with another 100 million people in America by 2040. It is expected that, between now and 2025, 85 percent of net household growth will consist of childless households. Households without children are the largest group even now, comprising nearly 70 percent of the total; a subset of that number, married couples without children, stands at about 28 percent.
Most surprising is the number of households made up of married couples with children: 21 percent. Do married couples with children buy more homes proportionally than other groups? Possibly. But their number is still a small slice of the total, and it should make you think twice about who you are building for and marketing to.
Whether you call them Gen Y, Echo Boomers, or Millennials, the group born between the years 1981 and 1999 is poised to change the face of housing in this country. This cohort will start buying their first homes within the next few years. If they buy at the rate that generations before them did, RCLCO estimates that “there will be more first-time home buyers in the market in 2013 to 2018 than ever before.”
The data about women buyers was even more astonishing. In 1978, 60 percent of college graduates were men—today, the reverse is true. And, women are now the majority in the workforce. RCLCO predicts that by 2015, WINKS (Gen Y women with incomes over $50,000 a year and no kids) will dominate the urban landscape.
Surveys undertaken by the company show that WINKS prefer urban or “urban-lite” areas for both home and work; and that they definitely want to live in locations that offer the option of walkability or easy proximity to transit. Even more important, they say they are willing to pay a premium for it.
Minorities will be the new majority in the U.S., and many of them are forgoing settling first in so-called gateway urban areas and heading right to suburbia.
Although many foreign-born Americans still gravitate to large cities, more than 50 percent now live in metropolitan suburbs. RCLCO predicts that in the not-too-distant future, Hispanics will make up 40 percent of all first-time home buyers.
The company also assembled some interesting data about how green and sustainable homes figure in buyers’ minds. A survey of buyers that asked about the most important factors when choosing a new home showed that nine of the top 15 are what might be considered green concerns. These include energy savings, indoor air quality, and pedestrian-friendly locations.
Hewlett’s presentation ended with a few important takeaways that you should consider when thinking about where and what you should build. Among them:
Take into account decreasing household sizes when designing new product.
Know that suburbs are still very important (no matter what the urbanists say), but they need to be reconfigured with gathering spaces, shopping, employment, and more.
And the most critical imperative (and perhaps the most difficult)? “Figure out what women want… .”