One-person households have been a market in housing forever. But, as is the case with so many other parts of the demographic landscape, the living-alone household is in flux.
Our romance--culturally, socially, and economically--with the married-with-children household, which is so hard-wired to investment, planning, design, and business modeling in residential construction and development, is hard to get past. Married couples with young children are the quintessential raw material of the American Dream, and once upon a time up until the 1970s or so, they made up more than half of all American households.
Now the prototypical "nuclear family" is but a quintile of American households, significant, but not dominant, especially for businesses that commit economic resources in a front-loaded, forward-looking way.
This changes a lot, literally. Land strategy and lot values take on new meaning when "non-traditional" households account for a greater and greater share of localities. Schools, job centers, transportation, access, convenience, connectivity, even the very notion of time ... all these critical landmarks that sculpted and gave meaning to the time-honored cardinal rule of real estate--location, location, location--devolve from clear social constructs to brutally bare base values.
What "where" means, and why it has to be here vs. there, changes.
Look, for instance, at Zillow senior economist Aaron Terrazas' take on "All Ages Welcome: Why Living Alone Isn't Just for America's Young and Old Anymore."
In broad strokes, Terrazas is spotlighting the trajectory of single-person households as a percentage of U.S. homes, noting that now, almost one in six U.S. adults lives in a one-person household, vs. a little over one in 10 about 30 years ago.
Terrazas' crunch of the Zillow numbers reveals these three key take-aways:
- Once relegated to the beginning and end of their adult lives, more middle-aged Americans are living alone than ever before.
- Young adults are no more or less likely to live alone today than a generation ago, with the possible exception of young women in their mid-20s.
- Growth in the number of Americans living alone has been driven by more divorcees, partially offset by fewer widows.
The light-bulb moment here is that real growth in the single-person household dimension of the demographic continuum is among men and women in their middle-ages. Many of these people are still in their better-to-peak earning career stages; many want proximity to children who may need good local schools or may not; and many may be opting for a single life by choice.
Since the mid-1990s, divorcees have accounted for the largest share of Americans living alone, but there are sharp differences between men and women (figure 4). The single/never-married crowd accounts for the largest component of men living alone; widowers have been steadily declining as a share of men who live alone. Widows account for a plurality of women who live alone, although their share has been steadily declining, while divorcees and single/never-married women are steadily increasing in share.
What are the lot strategy, community design and development, sales, and pricing implications that come with developing for this demographic shift?
More basically, perhaps, is the question of how home builders can avail of either their own or partners' insight into America's ever-more swiftly shifting demographic landscape. That way, they'll know who to to build for, and what to build, and where to build, and for how much.